If you've ever wondered whether IRAs can hold investments other than mutual funds, such as individual stocks, wonder no longer. They can.

An IRA itself isn't an investment. Think of it instead as a container that helps you avoid income taxes on earnings (and sometimes on your contributions, too) until you begin withdrawing money years later. (Roth IRAs permit you to invest post-tax dollars and later withdraw funds tax-free.) In your IRA, you're free to invest in a broad array of securities to be held in the account by a custodian. The custodian may be a bank, a broker, a mutual fund, or an insurance company.

If you want to invest in stocks yourself, establish your IRA with a brokerage in something called a "self-directed account." Then you can deposit your annual contributions, directing your broker when and what shares to buy or sell within that account. In this self-directed account, you can also trade in just about every security offered by the broker, such as CDs, bonds, T-bills, notes, and mutual funds.

There's another benefit to holding and trading stocks in an IRA account -- you get to avoid current taxation on any capital gains. Trade stocks in a traditional IRA account and the tax is deferred. Trade in a Roth IRA and, assuming you follow the rules, you'll be trading tax-free!

Learn more about retirement issues in our retirement area. We've got 401(k), IRA, and annuity information available, too. To learn more about brokerages and possibly find a better brokerage for yourself, check out our Broker Center.

And by the way, if thinking about retirement makes you wish you had a financial pro with whom to discuss your specific personal situation, that's not a bad thought. An advisor can help ensure that you're saving enough and properly enough to meet all your needs. Read more about TMF Money Advisor, a valuable new service we're offering, featuring customized independent advice from a variety of objective financial pros.

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