Advice needed for a good place to open an IRA account

[Guest Zelly Miller]

What are some good companies to get an IRA account?

My husband's financial adviser sent me stuff from Putnum about IRAs, but I noticed that I can only choose from Putnum funds. I am rolling over my 401K to a rollover IRA and want a variety of funds to choose from. I really like Fidelity and Janus funds.

I've thought about opening an IRA account at the credit union or at the bank where I have my checking and savings accounts.

I understand the difference between traditional IRAs and Roth IRAs, but none of the literature seems to address how to open an account, what funds are available, and how to manage it.

Thank you in advance for any advice.

Zelly

[John G]

This topic comes up a lot. You might find it covered from many angles with subjects like "help", "just getting started", and "new to investing" in the archives.

In brief, you first step in getting started in IRA land is to pick a custodian. The main choices are banks, mutual funds or fund families and stock brokerages. Banks tend towards conservative investments like CDs and sometimes loaded mutual funds (load means commission fees, often up front, sometimes when you take $$ out). I think beginning investors should stick with NO LOAD mutual funds. Grab the March or April Consumer Reports for a good list of funds and some common sense advice on retirement accounts.

Although you can go directly to mutual fund families like Janus and Fidelity, a second method of fund investing is depositing your IRA contributions at Etrade, Ameritrade, Schwab, etc. who all offer access to hundreds of mutual funds. Many of the brokerages will give you access to Janus funds... if they are actually open to new investors (another issue).

If you have many years to go before you retire, you should be heavily commited to equities (aka stocks). I just don't think you will be very happy with the long run returns that a credit union, thrift or bank will offer.

Visit some web sites. Talk to at least three different potential custodians. Ask about the range of investment options. Ask about annual fees.... these range from too high to zero. If your 401K assets exceed 10,000 you will find that almost all custodians will waive the annual fee if you just ask. They love retirement accounts because they expect to hang on to those funds for a long time.

Post again if you have more questions.