How Do I start an IRA

[Guest dshoward]

I am interested in opening an IRA. I would like to find out whether it is better to go through an investment company or a bank. Is there any other way to get started and if so, where do I go to find out more information. Thanks for your help.

[John G]

See many of the other replies at this site as "getting started" has been a common topic. You need to think about two things on the front end: who is my custodian, and what type of investments am I likely to make. Custodians can include banks, brokerages, mutual fund families, etc. Many of the brokerages such as Schwab and Etrade give you both options to buy stocks and mutual funds. You can move a Roth account, so initial choices do not bind you forever.

Lots of folks have no problem dealing with out of town firms, especially now that they almost all have outstanding web sites. Banks used to have fairly conservative choices but are starting to offer more options. Banks are ussually local and you may value face-to-face service. But don't expect to call someone on an 800 number at 11pm, and many have poor internet options. You may want to read the March issue of Consumer Reports (any prior year) or subscribe to Kiplinger Personal Finance mag. Both a good sources for beginners.

Ask about fees. There are many firms that do not charge any fees at all for IRA accounts. Others charge $10-20 per fund or account. The brokerage commission fees range from ultra low to high.

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