Q:

How do you open an IRA?

A:

Quick Answer

To open an IRA, research financial institutions, and select one with an acceptable fee structure and IRA program. Choose your ideal IRA type, such as a traditional IRA or Roth IRA. Open an account, make your first contribution, and then select an investment route.

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Full Answer

  1. Research financial institutions

    Most large banks and credit unions offer traditional or Roth IRA accounts. Compare the fee structures, minimum contribution limits, investment options and overall reputation of each institution, and then choose an institution that meets your investment goals.

  2. Choose an IRA account type

    Choose your IRA account type based on contribution limits, withdrawal policies and your age and income. Traditional and Roth IRA accounts offer different investment structures and regulations, such as taxable contributions and withdrawals, income-based contribution limits and age-based limits.

  3. Open an account

    To open an IRA account, complete an application with your contact information, income status and bank account information. Be prepared to supply documentation, such as payroll receipts and proof of a checking and savings account.

  4. Fund your account

    Make your first contribution based on IRA account requirements. Minimum initial contributions differ according to the account type and institution.

  5. Select an investment option

    After opening an IRA account, research the available investment options. Your financial institution may determine the investment types available, such as certificates of deposit, mutual funds, stocks and bonds.

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Related Questions

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    Should you invest in a CD or Roth IRA?

    A:

    A Roth IRA is not an investment, but a vehicle for investing. Funds placed the Roth IRA can be used for investing in CDs, stocks, bonds or any other type of security, Bankrate explains. As such, a CD and a Roth IRA cannot be directly compared.

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    Where can I find an IRA RMD calculator?

    A:

    IRA calculators for determining an account's required minimum distribution are available from the Financial Industry Regulatory Authority, Charles Schwab and Fidelity Investments. The Internal Revenue Service provides worksheets for IRA RMD calculations for both account holders and beneficiaries.

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    Where can I find basic information on IRA options?

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    Basic information on IRA options is available from the Internal Revenue Service and Fidelity Investments. Both Fidelity Investments and Forbes offer information on different investment options available for IRA account holders.

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  • Q:

    What are the vesting rules for a SIMPLE IRA?

    A:

    Simple IRA funds are always fully vested. This is also true of the Simple 401(k), but not true of some of the other widely used retirement plans, including the traditional 401(k) or the 401(k) Safe Harbor Plan, explains Raymond James.

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