How to Buy an IRA

Everyone is interested in securing a sound financial future. An IRA, or Individual Retirement Account, is one excellent way to save. Getting it started is half the battle. With a little work, you will be on your way to financial security.

Difficulty: Moderately Easy

Instructions

1. Research different brokers and their firms. Check their history and growth. Find out their annual fees and trading commissions to determine which is the right broker for you.

2. Decide which type(s) of IRA is best for you. Ask the broker to describe all Roth, Simple, SEP, Educational and Traditional IRAs available to you. Knowing all of your options is essential to making a good investment. If you are not totally happy, do not settle. They are in control of your money, so be comfortable.

3. Complete the necessary application with the chosen broker. Many applications are now done online. However, some firms continue to ask for a paper copy. Included with this application is typically a check for upcoming purchases.

4. Choose your investments and invest after fully researching the stocks and/or mutual funds you want to invest in. You may do this via telephone or computer to your broker or brokerage firm.

Tips & Warnings

• Buy index funds if you are unable or unsure of which funds to ask for.
• There is no dumb question. Ask your broker anything.
• Overtime, annual fees and trading commissions add up. This will reduce the account balance so be cautious with their fees.
• You have only 60 days to rollover any 401(k) proceeds.

Resources

• Find information on buying an IRA at The Motley Fool.
• Learn more about IRAs at ira.com.