Retirement

Why invest in an IRA?

Many financial experts estimate that you may need up to 85% of your pre-retirement income in retirement. An employer-sponsored savings plan, such as a 401(k), might not be enough to accumulate the savings you need. Fortunately, you can contribute to both a 401(k) and an IRA.

You should try to contribute the maximum amount to your IRA each year to get the most out of these savings. Be sure to monitor your investments and make adjustments as needed, especially as retirement nears and your goals change

What you should understand before picking the type of IRA you want...

Traditional IRA - You make contributions with money you may be able to deduct on your tax return, and any earnings can potentially grow tax-deferred until you withdraw them in retirement. Many retirees find themselves in a lower tax bracket than they were in pre-retirement, so the tax-deferral means the money may be taxed at a lower rate.

Roth IRA - You make contributions with money you've already paid taxes on (after-tax), and your money may potentially grow tax-free, with tax-free withdrawals in retirement, provided that certain conditions are met.

Rollover IRA - You contribute money "rolled over" from a qualified retirement plan into this traditional IRA. Rollovers involve moving eligible assets from an employer-sponsored plan, such as a 401(k) or 403(b), into an IRA.

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners

Best Individual Retirement Investing (IRAs) for

Broker Rating Commissions Promotion Account Minimum Learn More

5.0/ 5

$0

per trade

None

no promotion available at this time

4.0/ 5

$0

per trade

Up to $5,000

cash credit with a qualifying deposit

4.5/ 5

$0.01

per share

None

no promotion available at this time

4.5/ 5

$0

per trade (on eligible US securities)

$50 - $3,500

in cash bonus with qualifying deposit.