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| | | Called an Individual Retirement Arrangement, an Individual Retirement Account or an Individual Retirement Annuity, an IRA is a special government-defined and regulated account with tax advantages to help save for retirement. | | |
| Typical costs: | - IRAs are legally allowed to charge annual maintenance fees; many are $30-$50, others are as low as $20 or as high as $200 or more. The annual fee may be waived or larger accounts, and some IRAs are set up with no annual maintenance fees.
- Each time you buy or sell stocks, mutual funds or other investments in your IRA account, there can be either a commission charge or a transaction fee, which runs $7-$15 for discount brokers or $20-$100 or more at other institutions.
- The government imposes a 10 percent penalty for withdrawing IRA funds before age 59-1/2 unless the owner is permanently disabled or dead, or the money has been in the IRA for at least five years and is used to pay for non-reimbursed medical expenses, a first-time home purchase, higher education, to pay back taxes to the IRS, or to cover medical insurance premiums for the unemployed.
What should be included: | - IRAs are set up through a bank, savings and loan, credit union, mutual fund or brokerage. The money can be invested in mutual funds, stocks, bonds, CDs and annuities. Some IRAs require a minimum amount to open an account; others have no minimum.
- A traditional IRA allows you to save money without paying taxes until you take it out of the account while with a Roth Ira lets you pay the income tax now and withdraw the money tax-free during retirement. Both types of IRAs have eligibility requirements and other restrictions; AARP.org gives a side-by-side comparison.
- The Ohio State University Extension gives a detailed overview of how IRAs work, with definitions of common terms.
- The IRS lists instructions for setting up a Simple IRA as a retirement plan for the employees of a small business.
Additional costs: | - Some IRAs have a set-up fee of $25-$150 or more, and a termination fee of $50-75. They might charge $25-$75 an hour for doing research, or $2-$3 a page for making copies. Read the fine print, and ask specific questions.
Shopping for an ira: | |
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Article updated November 2006 |
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Recent Posts |
| Amount: $30,000.00 |
Avoid Smith Barney
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| Posted by: Investor Tom in Dayton, OH. | Purchased: 2009 |
| Company: Citi Smith Barney | Type of Fees: Yearly, Termination |
| Avoid Smith Barney IRA's. Their fees just went up to $75 per year, plus when I closed my account, they charged the $75 fee plus another $75 for "Termination Fee". These guys are really pirates. |
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| Posted by: a user in Sioux Falls, SD. | Purchased: 2009 |
| Company: Smith Barney | Type of Fees: Termination/Custodial |
| Avoid Smith Barney IRA's. They decided the small investore was not worth there time. They raised there fees (annual 75) and then when you moved the account off they charge more fees. Termination Fee and Custodial Fee. Whats worse yet the Custodial Fee is charged annually but they charged it on me again even thou I just paid it 8 months ago. These guys do not deserve to be in business and should be shut down by the SEC. DO NOT DEAL WITH THEM. |
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| Amount: $20,000.00 |
IRA termination fee
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| Posted by: Jim Y in Hood River, OR. | Purchased: March, 2010 |
| Company: US Bank | Type of Fees: IRA termination fee |
| I just rolled over a large IRA cd because US Bank was only offering 0.3%. They charged me $25 plus six months interest plus 1% of the principal balance. Don't they realize I am unlikely to business with them in the future? |
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Post About Your Experience With an IRA |
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