Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.

Recs

0

We Hate IRAs

IRAs: who needs 'em?

They just aren't sexy. You can't get rich quickly with them. As a result, they don't make good headline copy. Any story about IRAs here at the Fool is just gonna lack the oomph of other financial topics like "The Soaring Nasdaq," "The Sinking Nasdaq," or even "Alan Greenspan Sneezes!" Let's face it: IRAs are booorrring.

At least, that seems to be the attitude of the general American public. According to recent news reports, only 4% of those eligible for regular IRA or Roth IRA accounts contribute the full $2,000 allowed under law. We can forgive those of you with short attention spans, perhaps, for not fully funding your IRAs due to the dullness factor.

But everyone else ought to understand that IRAs enable you to save money and cut your taxes at the same time. That's something that should perk up everyone. And regardless of how boring they are, IRAs don't take much time to set up. In fact, the process is fairly quick and easy. We've outlined it in four steps below, and once you're done, you can go back to more exciting things, like reading about stocks in The Motley Fool Select.

Step 1: Are you eligible?
While most people can contribute to an IRA, there are a few restrictions. If your taxable income is above certain levels, or, in the case of traditional IRAs, if your employer offers a retirement plan at work, you may not be able to open an IRA. To figure out where you stand, check out the current income limits and other restrictions.

Step 2: Which IRA is best for you?
Everyone's situation is different, but as a general rule, you can't beat Roth IRAs for long-term, tax-free asset accumulation. However, if you want to reduce your current taxable income, than the regular IRA is your best bet.

To help with your decision, check out our overview of IRAs, and our comparison of the Roth and regular IRAs. We also have online calculators that will help you decide.

Step 3: Learn more
Can you buy stocks, bonds, and mutual funds in an IRA? When can you withdraw the money? When can you borrow the money? If you're not sure about these things, take a few minutes to learn more about IRAs in our Personal Finance area.

Step 4: Open a regular IRA or Roth IRA
Head on over to our discount brokerage center (DBC), which is chock full of information on choosing the right broker. For an IRA, you'll want low fees and commissions, since you're limited to contributions of $2,000 per year and don't want that money eaten up by expenses. At the DBC, you can also compare several sponsoring brokers, and take the first step to opening an account.

Other considerations
Interested in rolling over an old 401(k) into an IRA? Thinking about converting your traditional IRA to a Roth? Read more about IRAs in our "All About IRAs" series, and in our Tax Center.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1146193, ~/Articles/ArticleHandler.aspx, 5/27/2017 10:28:49 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 13 hours ago Sponsored by:
Change down DOW 21080.3 -2.7 0.0%
Change up S&P 500 2415.8 0.8 0.0%
Change up NASD 6210.2 4.9 0.1%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes