How to Open a Roth IRA Through Your Insurance
A Roth individual retirement account, or IRA, provides a way for workers to save for retirement. Eligible workers can set money aside now, watch it grow over the years and then enjoy tax-free withdrawals in retirement. That makes the Roth IRA a particularly good choice for younger workers and for those who expect to be in a higher tax bracket when they retire. A number of financial institutions, including insurance companies, banks and mutual fund companies, offer Roth IRAs.
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Contact Your Insurer
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It is helpful to shop around for the best deal when opening a Roth IRA. A number of insurance companies offer Roth IRA accounts, and shopping around helps you get the best deal. You can start with the insurance company that handles your car and home insurance, but you should expand your search to encompass other insurance companies.
Fees
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Some insurance companies charge high fees and expenses on their Roth IRA accounts, so it is important to compare those costs carefully. Be sure to get a proposal from each insurance company and compare the expense ratio of each Roth IRA you are considering. Also check for any annual fees that may apply to the account, since those fees can really add up over time.
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Contribution Limits
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No matter who the administrator of your Roth IRA is, you need to abide by the current Internal Revenue Service contribution limits for the plan. These contribution limits change from time to time, so it is always a good idea to consult with your tax preparer or accountant before making your annual contribution. For the tax year 2010, workers 49 years of age and younger can contribute up to $5,000 to their Roth IRA accounts, while those 50 years of age and older can kick in another $1,000, for a total of $6,000.
Investment Options
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Understanding your investment options is important, no matter who the administrator of your Roth IRA is. If you open your Roth IRA with an insurance company, you can have access to a number of different investment options, including mutual funds, insurance products and fixed income investments. Always research each investment option carefully, and compare the fees and expenses to keep your costs as low as possible.
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References
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