Quick Guide: The Best IRA Accounts for You

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If you are looking at your retirement plan, you’ve probably been to the top 10 and top 5 lists of the best IRA accounts, right? Well, while those lists might be helpful, you’ll need to know more about the nature of IRAs before you can pick the one that best for you. After all, retirement plans certainly aren’t one size fits all. Take a look at the guide to get started.

Best IRA accounts

What’s Best for You?

When you are asking what are the best IRA accounts, you really want to know what is the account for you. For example, if you have a successful 10-year career behind you, you are probably prepared to make a reasonable initial contribution to this account and wouldn’t mind early withdrawal penalties. Conversely, a young, up-and-coming entrepreneur probably has limited funds to invest initially and isn’t quite so comfortable with a sizable savings that can only be accessed via an expensive penalty.

The best IRA accounts meet the needs of the account holders. Before you go any further in the hunt for the best account, you should take a moment to answer some important questions:

Are you prepared to make an initial deposit? If so, how much can you reasonably contribute?

Is easy access to account funds without penalty important to you?

What kind of regular contributions are you prepared to make (at this time and in the future) to this account?

Are you looking for tax breaks in the short-term or during your retirement?

At this stage in your career, do you want reliable and stable investments or are you prepared to consider more risky options with high return potential?

Do you have a monetary goal in mind for your retirement account? If so, what is it?

During your retirement, do you think you’ll be in a higher or lower tax bracket than where you are now?

Types of Accounts

Now that you have a good grasp of where you are and where you intend to go, you’ll have a much easier time choosing between the various types of IRA accounts. When it comes to the best IRA accounts, the options below are the some common choices for many professionals:

Traditional IRA: For this option, you’ll have to be younger than 70.5 years of age. Your account is free to grow without taxes, but once withdrawals begin, the amounts will be subject to tax.

Roth IRA: For this account, the contributions aren’t tax deductible, but the later distributions aren’t taxable. The account’s earnings are taxable and if you make “unqualified” withdrawals, you’ll be subject to a fine.

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SIMPLE IRA: This option is ideal for sole proprietors because you can make contributions as the employee and employer. Of course, there are limits to the contribution, which you should keep in mind.

Pick Your Investments

The best IRA accounts are just that: accounts. They are tools for investment and while they are a crucial element to most retirement plans, they are not actually investments on their own. Instead, you choose how you invest your IRA funds. Here are some of the best IRA investments: 

Certificate of Deposit or CD: These are incredibly safe investments with a dependable return at a set rate. However, you have to agree to lock up your money for a specific amount of time.

Fixed Annuity: These are also very safe and have set return rates. Essentially, you give you money to a third party to manage in exchange for a guaranteed rate of return.

Securities and Bonds: The U.S. government backs these investments and this is generally considered a risk free route.

Mutual Funds: These funds can be invested in cash, bonds, stocks, gold or other assets, but you must invest with others.

Stocks and More: You can own stocks, real estate and many other types of investments. Many choose to invest dependable items like gold and precious metals.

What Are the Best Rates?

The best IRA rates will be determined by your investment choices. It’s incredibly common to see CD rates between one and three percent. However, other portfolio choices may receive a 10 percent rate. When you are choosing the best IRA accounts for you, be suspicious if you consult with a broker or agency that gives you and incredibly high rate. Make sure the rate is within reasonable range for your investment type and always read the fine print for your account.

The Benefits of a Diverse Retirement Plan

Sometimes, the trick to having best IRA accounts is just investing wisely. You may have heard the term “diverse portfolio” or something similar being tossed around. This basically means you didn’t just invest in one thing like CDs or securities. Why is this a good idea? Let’s say you invested in traditional paper fund and a fair amount of gold.

Gold, for the most part, always does very well despite market falls, while paper investments are very much subject to market trends. When the market fails, you’ve got an investment that will withstand the fall and save your accounts. Conversely, if for some reason gold’s value declines, chances are your paper investments are going through the roof. You’ve got a safety net for everything!

Weighing the Risks

When you choose your best IRA accounts, you’ll have to weigh the risks of your investments. You’ve probably heard of people doubling or tripling their money in the stock market, but their isn’t a formula for a successful stock investment. Things like CDs and securities are very dependable, but they have low rates. On the other hand, stocks will be much more volatile, but have much more potential for high returns. Managers of the best IRA accounts generally advise you to take risks early in your career when you have time to recover in the event of a mishap. Otherwise, those closer to retirement aren’t usually to willing to risk their accounts.

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Now that you’ve made to the end, you’ve probably learn there isn’t definitive best IRA account, Instead, it all comes down to what are the best IRA accounts for your goals. If you have questions, consider speaking with knowledgeable professionals at a reputable agency like Regal Assets.

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