Things You'll Need:
- Money to invest
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Step 1
Decide whether you want a Roth IRA or a traditional IRA. A traditional IRA allows you to take a current-year tax deduction, while a Roth IRA accrues income tax free but does not allow for a current tax deduction. The question you need to ask yourself is whether you want to pay taxes now or pay taxes later. There are also a few other specialized IRAs such as the SEP IRA (self-employed or small business), a SIMPLE IRA (employee pension plan) and a Self-Directed IRA (allows the holder to make their own investments into the plan).
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Step 2
Choose a place to invest your money. There are many IRA brokers with varying fees and trading commissions. You can also set up an IRA by using a bank, mutual fund company, employer, stockbroker or other financial institution who will act as a custodian or a trustee. Examples are Vanguard, Fidelity Investments, T. Rowe Price and Schwab.
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Step 3
Download or request the applicable forms to open up the account. Complete the forms and attach a check for the amount to be funded.
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Step 4
Choose the types of investments that you want your IRA invested in. Examples are stocks, mutual funds and index funds.
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Step 5
Watch your investments grow until retirement.
