The Ultimate Guide To Opening An IRA Account Online

With the convenience and accessibility of modern technology, opening an Individual Retirement Account (IRA) online has never been simpler. 

By following this comprehensive and foolproof guide, you can join the 55.5 million households reaping the benefits of having an IRA.

Read on to learn how to effortlessly seize control of your financial future with a few clicks.

Why Invest In An IRA

An employer plan like a 401(k) is great, but you may need more depending on your goals and when you plan to retire. That’s where an IRA comes in handy. 

More Investment Options

You can put funds into your 401(k) and an IRA each year. An IRA lets you supplement what you save at work.

Plus, you can access more investment options than your work plan. On top of that, your money has the potential to grow tax-free over time.

Maximizing what you put in your IRA each year is a good idea. That way, you’re getting the most savings possible.

As retirement gets closer, keep an eye on your investments and adjust if needed. 

Perks From Investment Partners 

Another benefit of investing in an IRA is that your savings partner may offer opportunities to help you grow your fund further.

Take, for instance, SoFi Invest’s contribution matching program. If you’ve been researching how to open an IRA online, you’ve likely come across SoFi’s program. 

Their online platform lets you fund your IRA from the comfort of your home. There are no forms to print or mail. You can easily log in and transfer money from your linked bank account.

The intuitive interface walks you through the process step-by-step. Within minutes, your IRA is open and ready to start investing. 

But that’s not all. SoFi offers a sweet perk: they’ll match 2% of your IRA contributions made during your first year.

That’s free money to supercharge your retirement. Just contribute $100 monthly for a year, and SoFi will deposit an extra $24 into your account. Over time, that can add up.

The bottom line is: don’t put all your eggs in one basket. Take advantage of IRAs to boost your retirement savings further. 

How To Open An IRA Account

Saving for retirement through IRAs is straightforward. Here is a simple yet comprehensive guide to help you with the online account opening process. 

Pick An Investment Style

You’ll first want to determine if you will manage your IRA investments or use a robo-advisor to handle them. 

A self-directed IRA gives you complete control over where your money is invested, but robo-advisors take the stress out of choosing investments.

Once you’ve made that call, it’s time to shop for the financial company you want to open your account with. 

When choosing between an online broker and a robo-advisor, start by thinking about how much you want to be involved in managing your investments.

If you like letting a computer program make investment decisions for you and handle your account, a robo-advisor might be the way to go. 

But if you prefer to be more hands-on and choose your investments, then an online brokerage where you can do it yourself might be better.

This decision will help determine whether you should set up your retirement account with an online brokerage or a robo-advisor.

Choose  Where To Set up an Account

Once you decide whether to take the DIY route or opt for a managed robo-advisory IRA, the next step is picking the right financial firm. 

If you prefer the convenience of having all your financial dealings in one place, consider an investment advisor that gives you the choice between self-directed investing and robo-advisory services.

When selecting where to open your IRA, doing your homework is essential.

Look into factors like annual IRA management fees, investment minimums, the range of investments available, customer service options, and what other customers say about their experiences. 

Once you’ve decided, you’ll gather all the necessary information to get that account up and running. It’s all about finding the best fit for your financial goals and preferences.

Look For Low Fees

Robo-advisors can take some of the stress out of investing if decisions are weighing on you. Look for those with low fees, usually 0.40% or less, with the features you want.

Most will automatically rebalance your portfolio and allocate things for you, but other services may vary between providers. 

When looking for a broker, you’ll want to find someone with low or no fees. Commissions should be minimal, too.

They must also offer mutual funds and ETFs you can buy without paying transaction fees. Customer support and learning materials are essential, especially if you’re new to investing. 

Check How Much You Need To Start Investing

Pay attention to any requirements for how much you need to open an account or invest in certain things. Some mutual funds have minimums of $1000 to get in.

ETFs are usually cheaper, though, since you can buy them share-by-share. If you pick one without commissions, that’s even better when you’re just starting.

Open An IRA Account

Go to your provider’s website. Once there, pick what kind of IRA you want—Roth or traditional are the main options. 

Then, fill in basic information like your Social Security number, birthday, contact information, and employment details.

Once that’s all set, you can check out the different ways to put money and get it growing over time for retirement. 

Fund Your IRA Account

Once you’ve decided where to open your retirement account, you’ll need to figure out how you want to fund it.

Usually, you transfer money from your bank into the account, move retirement funds you already have into your newly opened IRA account, or roll over a 401(k). 

Remember, there’s a yearly limit to how much you can put in an IRA—for 2024, it’s $7,000, or $8,000 if you’re 50 or older.

But you don’t have to maximize the deposit ceiling upon opening. Any amount is better than nothing when it comes to saving for retirement. 

Also, you don’t need to fund it all at once. Most people observe a strategy called dollar cost averaging.

It is where you contribute a set amount each month, and you do it regularly. For example, you could toss $100 into your IRA every paycheck.

Both Roth and traditional IRAs have income limits, too. Traditional IRAs only have limits if you or your spouse have a retirement plan through work. You can put money in a 2023 IRA until you file your taxes in 2024.

Rolling Over Your IRA

Suppose you switch jobs and have retirement money left in your old 401k. In that case, you can move it to your new company’s plan or an IRA. 

Rolling it into an IRA is usually the better option because IRAs have more investment options and lower fees than most 401ks. The IRA company will help you with the process. 

You must contact the administrator for your old plan and complete some paperwork.

Then, they’ll send your funds directly to the new IRA provider by check or by transferring them electronically.

Funding From A Bank Or Brokerage

You’ll need your account and routing numbers if you fund your IRA from your bank or brokerage. That information is usually accessible online or in your bank statements. 

If this is your first time setting one up, doing monthly automatic transfers might be a good idea so you don’t forget. 

Also, remember that the IRS limits how much you can contribute each year across all your retirement accounts.

So, if you have both a Roth and traditional IRA, you’ll need to combine what goes into both so the total stays at or below the annual limit. That way, you don’t owe any unexpected taxes during filing time.

Start Planning For Your Golden Years Now

Retirement may seem far off, but it’ll be here before you know it. That’s why you must start planning now. An IRA is a great way to get your savings on track. 

There are several options, so you can find one that works for you. It doesn’t matter if you’re young or older.

It’s always possible to secure your financial future. Take that first step and open an IRA today. Your future self will thank you for the favorable decision you made today. 

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