Opening Your IRA

Today is the Best Time to Open an IRA!

It is very important to start saving as early as you can for your retirement. You may think that your retirement is so far away that you don’t have to start thinking about it today, but you’re wrong. The earlier you can start saving, the better off you’ll be when your retirement approaches.

One of the best vehicles for saving for your retirement is with an Individual Retirement Account (IRA). An IRA is basically a personal retirement savings plan that will give you big tax breaks, making it an ideal way to put money away for your retirement. Opening your IRA today could set you free of future stress.

But I don’t have a lot of money to invest!

Many people think they need hundreds or thousands of dollars to invest with to be able to open an IRA.  This is not true – and the good news is that you can actually open your IRA with as little as $1!

It is true that some financial institutions do have a minimum requirement and don’t want to bother with small investment amounts, but if you follow our advice and recommendations, you’ll be able to open your IRA with as little cash as you’re comfortable with (even if it’s just 1 dollar).

But I already have a 401k!

You may also be thinking that your 401k, or other similar employee contribution plans, is all you need for your retirement… but you’d be wrong! While these plans will give you added confidence you’ll be able to retire in comfort, the truth is that they will most likely NOT fund all of your retirement.

Even if you already have an 401k from your job, it’s wise to give your savings a boost with an IRA. There really is no downside to doing so, but the potential upside is huge.

Types of IRAs

There are actually 2 main types of IRAs – the Traditional IRA, and the Roth IRA. The main different between the two plans are when you have to pay income taxes on the money you invest into the account. With a Traditional IRA, you pay your taxes on the back-end (tax-deferred), or when you’re withdrawing your money during retirement.

With a Roth IRA, it’s actually just the opposite. You’ll have to pay taxes on the frond-end when putting money into your account, but there are no taxes on the back-end (tax-free) when you’re withdrawing. There are income limits for contributions into a Roth IRA, so not everyone can take advantage of them.

So should you open a Roth IRA or a Traditional IRA? Generally, a Traditional IRA may be beneficial if you are eligible to make deductible contributions and expect your tax rate during retirement to be lower than it is today. But a Roth IRA may be a wise choice if you expect your tax rate to be the same or higher during retirement. However, don’t try to spend too much time trying to decide which one to open, as any account is better than none. You can always open the other at any time and may contribute money to both.

Opening Your IRA

You can establish and open your IRA with a bank, brokerage firm, mutual fund company, or an insurance company. All you have to do is fill out the paperwork and deposit your money, and your IRA exists. But before you go run off to your local bank and have them open your IRA there, you should know that many institutions charge incredible fees that you can easily eat away at your investment returns.

It doesn’t make sense to toss away your savings with high unnecessary commissions! Review our recommended IRA companies below to help you get started on the right path.

Best IRA Companies

Here is our top recommendations for which companies you should use to open your IRA.  Each one has NO hidden fees and NO account minimums – which makes them a perfect place for you to open your IRA.

Our #1 Pick:

Scottrade IRA

The best IRA provider we’ve found is Scottrade. This top IRA recommendation is earned by being a well-established, seasoned brokerage firm with an excellent reputation. Their IRA accounts are perfect for beginner investors, those who invest in mutual funds, and long-term (buy and hold) investors – making Scottrade is a natural choice all types of investors.

Scottrade IRAs are FREE: there are no IRA setup or annual IRA fees:

  • No-Fee IRAs
  • No Account Minimums or Custodial Fees
  • $500 Minimum Deposit Required
  • Easy Switching from your Current IRA Provider
  • Open your IRA with Scottrade now

The firm is consistently rated at the top in customer service and investor satisfaction – and they even have 500+ local branch offices for in person customer service and account assistance.

Lowest Price IRA:

  • OptionsHouse has no set up fees, no maintenance fees, no low balance fees, and no annual fees! They don’t nickel-and-dime your account with fees like some other brokers.
  • BONUS OFFER: Open Your IRA at OptionsHouse today and get up to a free $600 cash bonus!

Make sure to take the time and get your account opened right now. It will really only take a few minutes and you’ll be glad you did.

My Accounts Opened! What’s Next?

After your account is open and funded, then next step is to take your funds and start to invest them into stocks, bonds, mutual funds, or CDs so that your money has a chance of growing at a faster rate. An IRA itself is simply just an account – you have to choose how to invest your contributions and earnings.

Contributing to Your IRA

As long as you meet some specific limits on your income and contributions amounts, you can add funds to your account every year. However, most years both the income and contribution limits change, so it’s important to stay up-to-date with the current IRA rules and regulations.

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The information provided on this website does not constitute professional financial advice. We do our best to maintain current & accurate information, but some information may have changed since it was published. Please consult your tax or legal advisor(s) for questions & advice concerning your personal financial situation.