A Roth IRA is the best tax-advantaged account in the US for most people under 50. You put in after-tax money, it grows tax-free, and you pull it out tax-free in retirement. The only problem for Catholic investors is that the default fund options at most brokerages include companies that the USCCB Socially Responsible Investment Guidelines clearly exclude: abortion providers, contraceptive manufacturers, certain weapons companies, and companies promoting content contrary to Church teaching.

You can still build a clean Roth IRA. Here is the actual playbook.

First, Who Can Even Contribute to a Roth IRA?

For 2026, the contribution limit is $7,000 if you are under 50 and $8,000 if you are 50 or older. Income phaseouts apply: if you are single and earn more than roughly $168,000, your Roth contributions start phasing out and disappear entirely around $178,000. Married filing jointly, the phaseout starts around $248,000 and ends near $258,000.

If you earn too much, you have two options: do a "backdoor Roth" (contribute to a traditional IRA first, then convert) or use a Roth 401(k) at work, which has no income limits.

Assuming you qualify, here is how to set it up.

Step One: Pick a Brokerage That Offers Catholic Funds

Not every brokerage carries every Catholic mutual fund. Here is where you can reliably buy each major Catholic fund family:

Ave Maria funds: Fidelity, Schwab, Vanguard (with transaction fee), E*TRADE
Knights of Columbus funds: Schwab, Fidelity, E*TRADE
LKCM Aquinas funds: Schwab, Fidelity
Global X S&P 500 Catholic Values ETF (CATH): any brokerage

Fidelity and Schwab are the two most flexible. If you already have an account at one of them, you can buy pretty much anything Catholic without opening a new relationship.

Step Two: Understand What USCCB Screens Actually Exclude

The USCCB guidelines were originally written in 2003 and updated in 2021. They exclude companies whose core business involves:

Abortion (providers, funders, or manufacturers of abortifacients)
Contraception (as a core business)
Embryonic stem cell research
Human cloning
Pornography
Certain weapons, specifically landmines, cluster munitions, nuclear weapons used for indiscriminate attack
For-profit prisons (added in 2021)
Companies engaging in labor standard violations

The guidelines encourage positive screening for companies that support Catholic social teaching: environmental stewardship, fair wages, access to healthcare.

A fund that claims to be Catholic may apply these screens loosely or tightly. Always read the prospectus, specifically the section on exclusion criteria. "Catholic" is not a regulated term.

Step Three: Build the Actual Portfolio

Here is a three-fund Catholic Roth IRA that covers most bases:

Option A: The simple one-fund portfolio

100% Global X S&P 500 Catholic Values ETF (CATH)

CATH tracks the S&P 500 Catholic Values Index, which applies USCCB screens to the S&P 500. Expense ratio around 0.29%. Over most rolling periods it has tracked the regular S&P 500 within a fraction of a percent. For a set-it-and-forget-it account, CATH is the easiest choice.

Option B: The diversified three-fund portfolio

60% Ave Maria Growth Fund (AVEGX)
25% Knights of Columbus International Equity (KCIEX)
15% Ave Maria Bond Fund (AVEFX)

Ave Maria Growth focuses on mid and large-cap US growth companies. Its expense ratio sits around 1.17% (higher than index, but it is actively managed). AVEFX gives you some fixed income exposure that still passes Catholic screens. KCIEX adds international diversification with USCCB-compliant international holdings.

Option C: The low-cost hybrid

80% CATH
20% Ave Maria Bond Fund (AVEFX)

This gives you S&P 500 exposure at low cost with a small bond allocation for stability. Total expense ratio weighted is about 0.45%.

Step Four: Automate the Contributions

$7,000 a year works out to $583 a month or $270 per paycheck if you are paid twice monthly. Set up an automatic transfer from your checking account on the same day each month, ideally right after payday. Target the same day every month so it becomes invisible.

If $583 a month is too steep, start at $200 and raise it. A Roth IRA does not have to be fully funded to be worthwhile.

Real Numbers: Maria, Age 28

Maria is a nurse making $72,000. She contributes $500 a month ($6,000 a year) to a Catholic Roth IRA holding 100% CATH. Assuming a 7% long-term return:

Age 38: $87,000
Age 48: $258,000
Age 58: $602,000
Age 65: $1.03M

At age 65, all $1.03M is tax-free. If she had the same balance in a traditional IRA, she would owe perhaps $200K to $300K in taxes over her retirement depending on tax brackets. The Roth protects her from future tax rate increases.

Even better: because she stays under the $7,000 annual limit and her income is below the phaseout, she can do this every year without any backdoor gymnastics.

Handling the Dividend Question

Ave Maria Growth and most Catholic equity funds distribute dividends annually. Inside a Roth IRA, these are not taxable. You do not get a 1099-DIV for Roth activity and you do not owe anything to the IRS. Reinvest all dividends automatically. Most brokerages have a "reinvest dividends" toggle you can flip on when you buy the fund.

Watch Out for Fund Drift

Catholic fund managers review their holdings regularly, but things change. A company that was clean when you bought the fund may later acquire a subsidiary that violates USCCB guidelines. Funds generally divest, but there can be a lag.

Check your fund's annual report once a year. Look for:

Any new holdings you do not recognize
Discussion of "exclusion criteria" or "negative screening"
Changes in the fund's stated investment policy

If a fund drifts away from its Catholic mission (it does happen when fund managers change), switch to a different one. Inside a Roth IRA, selling and rebuying does not create a tax event, so switching is costless beyond any trading fees.

The Backdoor Roth for High Earners

If you make too much for a direct Roth contribution, the backdoor method works like this:

Open a traditional IRA at the same brokerage where you want your Roth
Contribute $7,000 in after-tax dollars (no deduction since your income is too high)
Immediately convert the traditional IRA to a Roth (should take 1 to 2 days)
Pay taxes only on any gains between contribution and conversion (usually zero or a few dollars)
Buy your Catholic funds inside the newly converted Roth

Important gotcha: if you already have pre-tax money in any traditional IRA, the "pro-rata rule" applies and makes this messier. Talk to a tax professional if you have existing traditional IRA balances.

Mega Backdoor Roth for Employees

If your employer's 401(k) plan allows after-tax contributions and in-service withdrawals (not all do, but it is becoming more common at larger employers), you can potentially push $40,000+ per year into a Roth via the "mega backdoor." Check your plan documents and ask HR for details.

Your Three Next Steps

Open a Roth IRA at Fidelity or Schwab if you do not have one. This takes 15 minutes online. Set up an automatic monthly transfer of at least $200. Pick one fund from Option A, B, or C above and buy it. You can optimize the portfolio later, but the most important thing is getting money into the account and growing.

A Catholic Roth IRA is not complicated once you know where the clean funds live. Start now and your 65-year-old self will thank you.

Catholic Roth IRA: Funds That Pass USCCB Screens