With all of the investment choices and terms thrown around in our markets today it can be very intimidating trying to find the best IRA account. if you do a search on the Internet for an IRA company you will be inundated with ads in all of them claim to have the best deals. However, picking the right company for your IRA investment dollars boils down to just a few simple items. The following should be helpful.
One of the biggest choices you will have when it comes to opening an IRA is whether or not you need investment advice. There’s no need to be ashamed if you need help with your choices. You will, however, end up paying more going to a full-service brokerage firm. The nice thing about a full-service brokerage is that many have local offices across the country where you can go and sit down and meet one-on-one. However, you should remember that no matter how friendly these investment reps are they are still commissioned salespeople. A better choice is often to spend a little money and hire a fee only investment adviser and let them decide what the best investments are for you and your risk tolerance. You can then use a discount mutual fund company or brokerage to buy the investments directly yourself nearly commission free.
If you are going to be doing your own investing then you will need to use individual stocks or mutual funds for your investment dollars. There really is no one good company which offers both low-cost stock trades and a good selection of low-cost mutual funds. For this reason, you will need to decide if you are going to use mutual funds or stocks. This will allow you to then choose the best company in their field. If you will be using a company which handles everything for you than this may not be of any concern.
The last, and most important, thing you need to remember when looking for an IRA company are the fees which will be associated with the account. There is no need to pay full service prices on stock trades when using individual stocks. Each time you trade or buy stocks or bonds you will pay a significant amount more on your trades if you do not use a discount broker such as Scottrade or TradeKing. For mutual funds there are a number of great companies whose management fees are much lower than the industry average. Always look for these low-cost fund companies and choose the one who has the greatest selection of funds to meet your investment goals. The reason this is so important is because extra fees will remove money from your account which could have been compounding for perhaps decades. Over time this can really add up.
- How to Choose Your IRA CD Investment (2010tax.org)
- Tax Carnival Ecstasy – January 24, 2012 (2012taxes.org)