Best IRA Accounts of February 2024

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Contributor, Benzinga
February 16, 2024
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Looking to save and invest for retirement? An individual retirement account (IRA) is one of the best options out there for tax-advantaged saving. Benzinga reviews IRA accounts, considering factors like account type, fees, investment options and customer service. Here is a list of the best IRA accounts in February 2024. 

Quick Look: Best Companies to Open an IRA Account 

Best IRA Accounts

Benzinga's top 10 picks cover a diverse range of IRA providers, each offering unique features tailored to satisfy the needs of investors. 

1. Best Overall No-Fee IRA Account: SoFi

SoFi offers Traditional, Roth and SEP IRAs where you can invest in various assets without worrying about trading fees, commissions, minimum balances or minimum deposits.

You can choose between active or automated investing and also get free access to certified financial planners who can assist you with your retirement strategy.

Why we like it:  SoFi lets you invest for your retirement without paying extra costs, giving you the flexibility and support to achieve your financial goals.

Pros

  • No trading fees, commissions or management fees
  • No minimum account balance or deposit requirements
  • Active or automated investing options

Cons

  • No tax-loss harvesting 
  • No socially responsible investing option
  • Basic portfolios with limited customization

2. Best for Self-Directed IRA: Rocket Dollar

Rocket Dollar empowers users to open self-directed retirement accounts and invest in alternative assets like real estate, cryptocurrency, crowdfunding and private equity. 

Rocket Dollar will set up an LLC or a trust for your account, which directly holds the assets, streamlining the process of setting up and managing a self-directed IRA or solo 401(k) account. 

Why we like it: Rocket Dollar offers a unique opportunity to diversify your retirement portfolio with off-the-market investments that can generate high returns and tax savings

Pros

  • Self-directed retirement accounts with tax advantages
  • A broad range of investments beyond stocks and ETFs
  • Simple and transparent fee structure

Cons

  • High setup and monthly fees
  • Limited research and trading tools
  • Not suitable for beginners or passive investors

3. Best for Tax-Deferred Crypto Investing: Bitcoin IRA

Bitcoin IRA enables you to buy and sell cryptocurrencies within a tax-advantaged IRA. It assists you to roll over existing retirement accounts into a crypto IRA and provides options for gold investing. 

You’ll also enjoy a user-friendly web and mobile interface, access to over 60 cryptocurrencies and multiple IRA options. While Bitcoin IRA offers self-directed IRAs for cryptocurrency and gold investing, it doesn't support other alternative assets like silver or real estate.

Why we like it: Bitcoin IRA provides a simple way to diversify your retirement savings with crypto and gold while enjoying the tax benefits of an IRA.

Pros

  • Tax-deferred crypto investing
  • Gold investing and ownership without storage fees
  • Easy rollover process from existing retirement accounts

Cons

  • High fees 
  • Limited investment choices beyond crypto and gold
  • Lack of fee transparency

4. Best for Low-Cost Crypto IRAs: iTrustCapital

iTrustCapital allows investors to easily trade and hold cryptocurrencies and precious metals within tax-advantaged IRAs. It boasts a straightforward fee structure, with no account setup or monthly fees.

It stands out for having some of the lowest fees among crypto IRA investing options and is highly regarded by customers.

Why we like it:  iTrustCapital makes it easy and affordable to include crypto and precious metals in your retirement portfolio.

Pros

  • Low 1% crypto trading fee
  • No account setup or monthly fees
  • Can transfer existing crypto held within an IRA

Cons

  • $1,000 minimum to open an account
  • Limited coin selection compared to some competitors
  • No staking feature available

5. Best for Free Financial Planning: Wealthfront

Wealthfront is a robo adviser that uses smart algorithms to create and manage a diversified portfolio tailored to you. Wealthfront offers traditional and Roth IRAs as well as other types of retirement accounts with a minimum investment of $500.

Its fee structure is straightforward — a flat 0.25% fee. Wealthfront also provides free financial planning through its proprietary Path tool. Path helps you set and achieve your savings goals, making planning for your financial future easier.

Why we like it: Wealthfront is a low-cost and hassle-free way to invest for your retirement and get personalized advice.

Pros

  • Low management fee 
  • Free financial planning with Path
  • Automatic portfolio rebalancing and tax-loss harvesting

Cons

  • No human advisers available
  • Cannot convert to a Roth IRA within Wealthfront
  • May incur fees from the exchange-traded funds (ETFs) used in the portfolio

What is an Individual Retirement Account?

An individual retirement account (IRA) is a special type of savings account designed to help you save for retirement while offering certain tax advantages. Its primary goal is to help your money grow over time, providing a source of income during your golden years.

Contributing to a traditional IRA may qualify you for tax deductions, depending on your income and eligibility. The money invested in a traditional IRA grows tax-deferred, meaning you only pay taxes on your investment earnings when you withdraw them in retirement. This tax deferral allows your money to compound faster compared to a taxable account.

Alternatively, a Roth IRA offers tax-free growth, meaning you won't pay taxes on your investment earnings ever. Also, under certain conditions, you can withdraw your contributions from a Roth IRA at any time without facing taxes or penalties.

Which Type of IRA is Best?

Contributing to an IRA is an important step in securing your financial future, so it's essential to choose the best option available.

  • Traditional IRA: This retirement account lets you contribute money before taxes and delay paying taxes until you retire. Depending on your income and if you have a retirement plan at work, you might deduct your contributions from your taxable income.
  • Roth IRA: With a Roth IRA, you contribute money after taxes and withdraw it tax-free in retirement. While you won't receive a tax deduction for your contributions, you also won't pay taxes on your investment earnings or distributions.
  • Rollover IRA: A rollover IRA is a method of moving funds from another retirement account, like a 401(k) or 403(b), to an IRA. It helps consolidate your retirement savings and gives you greater control over investment choices.

Is a Roth IRA Better Than a Traditional IRA?

Choosing between a Roth IRA vs. traditional IRA depends on your current and future income tax rates and personal preferences. 

A Roth IRA lets you contribute post-tax dollars and withdraw them tax-free in retirement. This feature is helpful if you expect to be in a higher tax bracket when you retire or want flexibility with withdrawals.

A traditional IRA allows you to contribute pre-tax dollars, reducing your current tax bill. However, you'll pay taxes on withdrawals in retirement. It's advantageous if you expect to be in a lower tax bracket when you retire or want to lower your adjusted gross income (AGI) to reduce taxes.

Both types offer tax-deferred growth of investments but with different withdrawal rules. Roth IRAs have no required minimum distributions (RMDs), allowing you to keep money in the account indefinitely or pass it to heirs tax-free. Traditional IRAs have RMDs starting at age 72 (73 if you reach age 72 after Dec. 31, 2022), requiring you to withdraw a certain percentage annually and pay taxes on it.

How Do I Choose an IRA Account?

When choosing an IRA account, consider these factors.

  • Account type: Decide between a traditional IRA, a Roth IRA and others based on your tax situation and preferences. 
  • Contribution limits: The IRS sets annual limits on IRA contributions. For 2023, it was $6,500 ($7,500 for those 50 and older). In 2024, the limit increases to $7,000 ($8,000 for those 50 and older). These limits apply to all your IRA accounts combined.
  • Investment options: Look for an IRA provider offering a variety of low-cost investment options like index funds, ETFs, stocks and bonds. Ensure they provide tools and resources for portfolio management, such as robo-advisers, financial planners and research materials.
  • Fees and expenses: Seek providers with low or no commissions, account fees, transfer fees and management fees. Pay attention to fund expense ratios, ideally aiming for less than 0.5%.
  • Customer service: Choose an IRA provider with customer service options that suit your preferences, whether it's live chat, phone support or email. Check its reputation through customer reviews, ratings, awards and complaints to ensure satisfactory service.

How to Open an IRA Account

To open an IRA account, follow these steps:

  • Choose between a traditional or Roth IRA based on tax treatment
  • Compare providers
  • Check minimum balance requirements before opening an account 
  • Start investing in stocks and bonds once the account is open and the minimum balance is met

IRA Contribution Limits

The IRA contribution limits for 2024 are $7,000 ($8,000 if you're 50 or older) or your taxable compensation, whichever is less. These limits apply to both traditional and Roth IRAs and include the total contributions across all your IRAs each year.

Can I Switch my IRA?

Yes, you can switch your IRA to a new provider without penalty, but it must be to the same type of account. This process is called an IRA transfer and here’s how to do it:

  • Contact the new provider and give them your details
  • Fill out any necessary forms they provide
  • Wait for the transfer to finish, which might take a while
  • Check your new IRA to make sure the money is there

A Comprehensive Guide to IRAs

Whether you opt for a traditional or Roth IRA, choosing the right IRA account involves looking out for low fees, diverse investment choices and reliable customer support. Opening an IRA is straightforward — select a provider and meet minimum balance requirements and you’re good to go. Remember, planning for retirement wisely now can lead to financial security later on.

Frequently Asked Questions

Q

Who has the highest interest rate on IRA?

A

The interest rates on IRA accounts can vary depending on the financial institution. The best IRA rates (IRA CDs) for February 2024 typically range from 2% to 5.40% APY.

 

Q

What is better than an IRA account?

A

There isn’t a single best retirement account, as various alternatives have advantages and drawbacks depending on your circumstances. However, some alternatives to consider include Treasury securities, certificates of deposit (CDs) and taxable investment accounts.

 

Q

What are the limits for a 401(k) account?

A

The contribution limits for a 401(k) account are $23,000 for individuals under 50 years old and $30,500 for those 50 and older in 2024.

 

Q

What's the median retirement savings by age?

A

The median retirement savings for those aged 55 to 64 years old is around $89,716 and for those 65 and above, $87,725.