by John P Cummings

Created on: February 26, 2008   Last Updated: September 22, 2008

Though there are many ways to save for retirement, few have the power for long term growth than an Individual Retirement Account (IRA). IRA's are individual retirement accounts that are maintained by a financial institution, but are set up and managed completely by you, the investor. IRA's (either traditional or Roth IRA's) can contain any various types of investments; stocks, bonds, mutual funds, even real estate or precious metals, the choices are endless.

IRA's can be set up at a traditional or online brokerage firm (Charles Schwab, E-Trade, TD Waterhouse), Mutual Fund Company (Oakmark, Vanguard, Fidelity), Banking Institution (Bank of America, Washington Mutual, Wells Faro) or a diversified insurance/financial company (AIG, Pacific Life, Mass Mutual). These accounts can be set up by in person, via telephone, or online. You should research each of these various companies by visiting their websites and comparing what choices each one will offer. Company websites are increasingly comprehensive and often you can set up your IRA account online in just a few minutes.

When researching (online preferably) where to set up your IRA account, compare all the various fees and charges that a company may charge you for maintaining your IRA account. Maintenance fees, initial account set up charges, and annual fees based on the dollar value of assets held are all common charges. Focus on keeping account fees and charges to a minimum as they will slowly eat away at the rate of return on your investment. If you end up paying fees, most companies will have an option that you can pay these fees from outside of your IRA account. When doing your research, check to see what investment options each company offers, what their minimum balance to open an account is, and other important information.

When initially setting up your IRA account, you will likely need to fund it with an initial contribution, often at least $500 or $1,000. Many companies will also have the option to set up regular and periodic (most often monthly) electronic transfers into your IRA account from a checking or savings account. This is often the best bet for investors who want to set up an account, but don't have enough for a large initial deposit, since many companies will allow you to set your IRA with as little as a $50 or $100 per month in an electronic monthly transfer.

Setting up and regularly funding your Individual Retirement Account is a powerful and important step to ensuring that you will have enough money for retirement. IRA's have the potential to yield tremendous tax-free returns over long periods of time, so get started, do some research, and begin saving for your retirement. Knowing that your retirement is in your own hands can be a strong and empowering feeling.

Learn more about this author, John P Cummings.
Click here to send this author comments or questions.