Best IRA Accounts

An individual retirement account (IRA) is a retirement account that allows you to save for the future on either a tax-deferred or tax-free plan.

Open an IRA and it’s a great way to help build wealth and watch your money grow, especially if your employer does not offer a 401(k) program, you are self-employed or you’re a younger investor. Read on for a crash-course in IRAs and saving for retirement.

Quick look – our favorite IRA providers:

• Best overall:  TD Ameritrade
• Best for beginners: Ally Invest
• Best for commission-free trading: E-Trade
• Best robo advisor: Betterment, Wealthfront
• Best for buy-and-hold investors: Vanguard

First, you need to choose if you need a Traditional IRA, Roth IRA, or 401(k)

Before you decide on an IRA provider, you’ll need to choose whether a traditional or Roth IRA is right for you.

1. Consider how you’ll want to be taxed

In short, a traditional IRA allows you to deduct contributions on your annual federal tax filing, essentially allowing you to defer your tax payments until you withdraw your money in retirement.

A Roth IRA forces you to pay taxes on your contributions, but you don’t have to pay taxes when you withdraw the money. This means you can pretty much watch your investment grow tax-free. If you believe that taxes will be higher when you retire, you should choose a Roth IRA. If you feel that the reverse is true, a traditional IRA is probably right for you.

A 401(k) is an employer-sponsored plan, often coming with a match from your employer, where you can save and invest your pre-tax earnings. If this is available to you, use it! But if you go over your annual contribution limits, another investment vehicle, like a traditional IRA, work great for you.

2. Consider contribution limits

The IRS has placed some pretty strict limits on how much money you can contribute to your IRA every year. Regardless of whether you have chosen a traditional or a Roth IRA, you can only contribute a maximum of $5,500 to your account per year.

As you age, the government allows you to contribute a bit more. Investors over the age of 50 can contribute up to $6,500 annually.

3. Consider income restrictions

There are also some restrictions on IRA contributions if you make over a certain amount of money. If you earn over $133,000 annually and you’re filing your taxes as a single individual, you’re not eligible for an IRA. Couples who file a joint income of over $196,000 are also ineligible for both the traditional and Roth IRA.

Features	Roth IRA	Traditional IRA	401(k)
Tax benefits	Tax-free growth and qualifying withdrawals	Tax-deferred growth and tax-deductible deposits	Employer-sponsored savings, save & invest pre-tax earnings
Age requirements	No requirement	Must be under 70.5 years old to contribute	21 years old
Contribution limits	$5,500 for those under 50 years old, $6,500 for those 50+	$5,500 for those under 50 years old, $6,500 for those 50+	Employees can contribute up to $18,500 (not including employer match)
Income limits	Depends on marital status and adjusted gross income	No	No
Taxes on withdrawal	No	Yes	Yes
Taxes on deposits	Yes	No	No
Early withdrawal penalty	Yes, pay taxes on amount plus 10% penalty	Yes, in some cases a 10% penalty	Yes, pay a penalty
Required withdrawals	No	Yes, by age 70.5	Yes, by age 70.5

How we chose the best IRA accounts

Put simply, these three companies are at the top of the list because they go above and beyond industry standards.

• They are trusted household names, an obvious necessity when your nest egg is on the line.
• They offer a depth and breadth of products, pack a punch with their customer service options, and don’t miss the mark in providing a boatload of educational opportunities through their websites and platforms.  
• They have reasonable (or free!) commissions and fees so you can maximize your long-term investing power.

Best overall

TD Ameritrade

TD Ameritrade is perfect for every sill level, as there’s a $0 required minimum balance. TD Ameritrade offers in-depth, yet easy-to-understand research and investment advice.

The company also offers a number of customer service options, including 24/7 phone support, email, text, Facebook messenger support, and local branch advising options.

The investing giant also offers a massive range of investment options, with 300 commission-free ETFs and over 4,000 no-fee mutual funds.

One of TD Ameritrade’s most unique functions is its brokerage boot camp—you can choose a trading level (rookie, intermediate, or expert) and TD Ameritrade’s platform will redirect you to investing research, articles, quizzes, and videos on better retirement planning tactics. 

Read Benzinga’s full TD Ameritrade Review

Best for beginners

Ally Invest

Ally Invest’s comprehensive suite of investment planning tools now rivals most major online brokers.

Like TD Ameritrade, Ally Invest comes with $0 account minimums, which can make it an appealing option for newer investors.

However, the IRA provider falls short when it comes to investing in mutual funds. Ally Invest offers no commission-free mutual fund investments, and you’ll need to pay a $9.95 commission on each mutual fund investment, meaning that Ally Invest is a good choice for the active trader. But Ally does offer a plethora of commission-free ETFs to make up for it. 

If you’re looking to stick your money into a mutual fund, you’re better off choosing another IRA provider.

Read Benzinga’s full Ally Invest Review

Best for commission-free trading

E-Trade

You probably already know about E-Trade for its intuitive stock buying program, but the company also offers an impressive range of mutual funds (over 150) and a massive range of NTFs (over 4,000).

E-Trade’s most unique option is its library of retirement planning advice, news stories, and how-to articles that can be useful to novice investors and seasoned traders alike.

If you’re looking to place your retirement funds into commission-free ETFs, E-Trade is a great option that offers mobile compatible support, plenty of data and research options and a $0 account minimum for IRAs.

Read Benzinga’s full E-Trade Review

Best robo advisor

Betterment

Centered around goal-based saving, Betterment is a great choice for hands-off investors who want to learn more about how to save for retirement. Betterment supports traditional, Roth, and rollover IRAs, which are IRAs originating from your old employer-sponsored 401(k) and offers automatic tax-loss harvesting on all accounts.

When you create an account with Betterment, you’ll be guided through goal-setting exercises to help you analyze your finances and lifestyle to create a reliable and sustainable plan to grow your money for retirement. You can even set up auto-deposits to keep you on track to meet your short- and long-term goals.

Betterment’s RetireGuide offers IRA holders a personal picture of all of your savings, including on non-Betterment accounts, and offers tips and advice on saving and estimated retirement dates. Betterment is best if you’re a hands-off investor who prefers to have automation help you build your IRA.

Read Benzinga’s full Betterment Review

Wealthfront

Wealthfront is another great robo-advisor investment platform. Instead of an expensive personal financial advisor, Wealthfront’s team of algorithms analyze the market and make recommendations on where to invest based upon your capital, age and risk tolerance.

After you open an account with Wealthfront (there is a small $500 minimum account balance), the system’s robo-advisors will allot your money into a diversified range of ETFs.

Traditional, Roth, and rollover IRAs included, Wealthfront is best used by investors who aren’t interested in managing their own retirement account but who don’t want to deal with the high fees and minimums that come along with hiring a financial advisor.

Read Benzinga’s full Wealthfront Review

Best for buy-and-hold investors

Vanguard

With over $3 trillion in managed assets, Vanguard is one of the largest IRA providers in the world. Vanguard’s standout features are its low-cost mutual funds and high-performing ETFs.

Investors can open an account with as little as $1,000, but many of the most popular funds (including the cornerstone Vanguard S&P 500) require an initial investment of $3,000. Though Vanguard may forgo the $0 minimum account balance offered by competitors, the company more than makes up for it with attentive customer service (with extended phone and chat hours) and a massive range of index funds.

Vanguard’s traditional and Roth IRA plans are best utilized if you’re a buy-and-hold investor who has a bit of cash saved up to open an account.

Read Benzinga’s full Vanguard Review

Now, follow through!

If you made it through all that technical jargon, good job. It’s even more essential that you read, digest this information, and actually do it.

Maybe this will motivate you (nothing motivates some people more than a compound interest table).

Check out what $100 per month can do for you at a rate of 12 percent (now, I know that 12 percent is quite high, but the concept is still the same, whether your rate is eight percent or ten.)

Time	Value	Time	Value
5 years	$8,167	30 years	$349,496
10 years	$23,004	35 years	$643,096
15 years	$49,958	40 years	$1,176,477
20 years	$98,926	45 years	$2,145,469
25 years	$187,885	50 years	$3,905,864

If your employer doesn’t offer you a retirement plan, it takes even that much more initiative to open up your own IRA. If you can’t decide, it’s better to just choose a fund, already!

One last tidbit: Don’t sign up for a particular retirement plan just because your next-door cubicle neighbor Joe signed up for the same one. Your situation may be completely different from Joe’s (not to mention, if you’re 20 years younger than Joe, your portfolio should look much different).

That’s why assistance is available and you should take advantage of it, and with those three brokerages at your disposal, you won’t miss a beat.