Let's start with what a Roth IRA is NOT. It's not a stock. It's not an investment you buy. It's not something only rich people have. A Roth IRA is an account type — like a container — and what you put inside it is up to you.
The magic of the Roth is this: you contribute money you've already paid taxes on, and then it grows completely tax-free. When you retire and withdraw it? Zero taxes. None.
Most people can open a regular Roth IRA directly. You can contribute up to $7,000/year in 2024 if you earn under $146,000 (single) or $230,000 (married).
If you earn above those limits, you can't contribute directly. That's where the backdoor Roth comes in — a completely legal workaround. You contribute to a Traditional IRA (no income limits) and then immediately convert it to a Roth. It's a two-step process, but it's not complicated once you see it.
If you're just starting out and earning under the limits, skip the backdoor. Open a regular Roth on Fidelity and start contributing. The backdoor strategy is for when your income grows past those thresholds.
Go to fidelity.com → Open an account → Choose "Roth IRA." It takes about 10 minutes. You'll need your Social Security number, a bank account to link, and to answer a few questions about investment experience.
No minimum to open. No fees. Fidelity is free.
Link your bank account and transfer money in. Even $50 to start. The money will sit as cash until you invest it — it doesn't automatically go anywhere just by depositing it.
People open the Roth IRA, put money in, and then leave it as cash thinking they're "investing." You're not — you're just holding cash in a special account. You have to actually buy something (like FXAIX) with the money you deposited.
Inside your Roth IRA on Fidelity, search "FXAIX" → click Buy → enter the dollar amount → confirm. FXAIX tracks the S&P 500 with a 0.015% expense ratio. This is what I buy.
If you're doing this on a different platform, VOO is the equivalent ETF that works anywhere.
The real wealth-building move: set up automatic monthly contributions. Even $100/month into your Roth IRA, invested in FXAIX, compounds significantly over 20–30 years. The habit of contributing consistently matters more than the amount at first.
If your income is above the limits, here's the backdoor Roth on Fidelity:
Step 1: Open a Traditional IRA on Fidelity (different from your Roth). Contribute up to $7,000 here (no income limit to contribute to Traditional).
Step 2: Within a few days (don't invest it yet), go to Accounts → Convert to Roth IRA. Select the Traditional IRA and convert the full amount. Done. It's now in your Roth.
You'll owe taxes on any earnings between deposit and conversion — which is basically nothing if you do it quickly. Do this every year.