Opening an IRA is a logical choice for those without a 401(k) or similar workplace account to store their retirement money. IRAs offer tax incentives that make them an attractive place to park money.
However, not all IRAs are the same. There can be vast differences in their tax benefits, investment options and growth potential. “It’s probably the most complicated financial product we have,” says Nancy Coutu, co-founder and principal of Money Managers Advisory in Oak Brook, Illinois. According to finance experts, there are three components to finding a great IRA.
Select the right type of IRA. Christian Cordoba, a personal wealth manager with California Retirement Advisors in El Segundo, California, says you can break IRAs down into 10 different types. These include the myRA, offered by the government, as well as specialized products such as SIMPLE and SEP IRAs that are set up through a workplace. However, for most people, the decision comes down to either a traditional IRA or a Roth IRA.
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