Graduated Learning: Life after College

I got my degree, I got a job…now what?

Where should you open your IRA account? April 9, 2014

Filed under: Uncategorized — Stephanie @ 9:47 pm
Tags: , , ,

This blog post is more of a survey for my readers and a reminder (to open/fund their IRA) than advice.  But I hope everyone who comments has some great insight!

Here’s the deal.  I’ve been obsessed with personal finance since I graduated college in 2006.  I opened a Roth IRA in 2007 and have fully funded it every year.  My fiance and I have also been together since 2007, and he’s read all of my posts about IRAs (Opening an IRA:  No excuses, Should Everyone Contribute to a Roth IRA? and even How often should I contribute to my Roth IRA?).  But he never opened one.  And until we were engaged, I thought “well, that’s none of my concern” and barely nagged him about it.  But now that we’re in this for the long haul, I realized I need to amp up my nagging and get him to open and fund an IRA before the April 15th deadline for 2013 (yes, that’s right, you can fund last year’s IRA up until this year’s Tax Day).  As a note, for 2013 and 2014, the contribution limits for IRAs is $5,500 (or $6,500 if you’re 50 or older).

I thought he had all the information he needed.  But he came back with one more question:

Where should I open my IRA?

It’s a valid question.  There are lots of companies out there.  Most banks, credit unions, and discount brokerages offer an IRA.  But they all have different fee structures and funding options.  Some will waive fees if you set up automatic contributions.

Unfortunately, I don’t actually have the answer for what company to go with.  I opened my IRA at Fidelity mostly because it was a company I had seen my parents using in the past, and it was a well-recognized name.  It later worked out that my new (current) job runs their 401(k) through Fidelity, which proved to be convenient for a number of reasons:  only one login to remember, and I could analyze my entire portfolio in one place.

I put out a quick tweet to seek advice for where to open an IRA.  From DQYDJ, I heard Fidelity, Scottrade, T. Rowe Price, and Tradeking.  Jeff Rose seconded the advice for Scottrade. (Then Scottrade chimed in with a link to an incentive to open an IRA with them).  My (real life!) friend Brian says he has his IRA with USAA, holding Vanguard funds (I agree with the Vanguard funds, I’ve heard really good things about their low-cost index funds).  Then the Debt Free Guys said they like their Schwab account.

So, I don’t know if that helps at all.  Unfortunately, my best advice is to shop around at different companies and see what sort of fees they have, what kind of funds they offer and what (if any) minimum investment requirements there are!  Some funds have very high minimum requirements, though the minimums may be waived if you sign up to auto-contribute to your account.

Lastly, check out the comments as they (hopefully) come in.  I’m always looking to friends for advice, and this is no exception!  Tell me what companies you like (and don’t like) for retirement accounts!  And share your insight for what else to look for in a company!

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5 Responses to “Where should you open your IRA account?”

  1. I have my retirement in Vanguard because I like the low expense ratios for their index funds. If you have a certain amount, you qualify for Admiral shares which result in even lower expense ratios. Plus, I like that every time I call I get a real life human within a minute or two.

  2. Alisha Says:

    Timely post! I’ve also been trying to get my SO to start a retirement account. He is going for his PhD in CS. One thing he pointed to me though, is that within a couple of years, when he graduates, he’ll likely be making more than the income limit (damn CS people). Do you have any thoughts on whether or not it’s “worth it” to start a Roth if someone can only contribute a small amount for 2-3 years? Maybe a traditional IRA is more the way to go? Or just keeping the cash for the time being, it’s not like returns are particularly high.

  3. Monica Says:

    Two questions… First, do you fund your Roth IRA in addition to / in place of funding your 401(k) through your employer? And second, have you ever heard of Wealthfront / if so, I’d be curious to hear what you think of it!

    • Stephanie Says:

      Hi Monica,
      Yep, I max out the Roth IRA and also contribute beyond my employer’s match on my 401(k). I like having the flexibility with post-tax and pre-tax. I haven’t heard of Wealthfront but I’ll look into it!

  4. We are Vanguard all the way on ours. Just jump in and get in the Roth’s that is the most important thing. Get started you won’t regret that you did, you will just wish you had started sooner.


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