Who Do I Talk To About Opening An IRA?
An Individual Retirement Account, or IRA, can be one of the most powerful tools available to you when it comes to saving for retirement. Depending on your circumstances and goals, an IRA could even offer tax advantages that make all the difference in terms of saving for future needs.
Roth IRAs can be opened at various financial institutions such as banks, brokerage firms and mutual fund companies. You may even consider opening one with an automated advisor who will create and manage an investment portfolio on your behalf.
What are my options?
There are various investment options available when it comes to your IRA. From choosing investments yourself with a brokerage account to hiring someone else to manage and allocate them on your behalf using a robo-advisor, there is something to suit everyone.
Anyone wishing to invest on their own can open a taxable brokerage account with minimal or no transaction fees and choose from among a range of stocks, bonds, ETFs and even cryptocurrency offerings. They may even hold nontraditional assets like real estate or business ownership interests.
Investors nearing retirement typically opt for more conservative investments like mutual funds and ETFs, though gold bullion may meet certain standards if it meets specific standards. Unfortunately, IRAs do not lend money directly to disqualified individuals such as family or friends.
How do I get started?
SmartAsset’s free tool connects you with pre-vetted financial advisor matches who you can interview for free to see whether they’re the perfect advisors.
If you prefer self-managing your IRA investment portfolio, an online broker or robo-advisor could be the right fit. Robo-advisors use algorithms to automatically build and maintain diverse portfolios for clients; typically charging lower fees than financial advisors.
Setting up and funding an IRA takes some planning, but it could be one of the most crucial steps towards realizing your retirement goals. The earlier you begin saving, the faster it can grow.
Do I need a financial advisor?
If you prefer managing your IRA investment portfolio yourself, an account with a bank, brokerage firm, or mutual fund provider with low or no trading fees as well as minimal account and transaction fees could be the way to go.
If you need assistance selecting and monitoring your investments, an IRA provider with professional investment services can offer guidance – such as providing an automated portfolio rebalancing feature. Or if you prefer taking a hands-off approach, look into investing through a robo-advisor instead.
If you prefer an immersive financial planning experience, an advisor can assist in developing a long-term financial plan covering everything from college savings and estate planning strategies to tax strategies and rollover of 401(k) accounts or previous employer retirement accounts into an IRA.
What are the fees?
Fees associated with your IRA account can make or break your retirement savings goals, but the good news is that there are providers offering low or no fee IRA accounts with competitive management and commission fees.
Fees associated with an Individual Retirement Account (IRA) can include asset-based, trading and management expenses, plus no or low account minimums and commission-free investments such as mutual funds, exchange-traded funds (ETFs) and index funds.
Banks, credit unions and online brokers typically provide IRA accounts. You can open either a traditional or Roth IRA with these providers; however, your investment options may be more limited; for a wider selection of investments it might be beneficial to open one with a brokerage or robo-advisor instead.
What are the investment options?
Your IRA investment options range from mutual funds and ETFs, individual stocks, bonds and rental real estate – each type will present its own level of risk and return potential.
Look for a custodian that provides a range of investment options, including alternative assets like real estate and precious metals. Look out for one with low fees as well.
Treasury securities (Treasuries) are among the safest IRA investment options, offering lower returns compared to other asset classes but reducing overall portfolio risk. Other safe IRA options include index funds and ETFs which offer greater diversification benefits than individual stocks, or you could work with an automated advisor who selects and manages an IRA portfolio for you.
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