There is nothing more devastating than saving up for years only to find out in the end that all your hard work was for nothing because of a shaky retirement plan. When it comes to planning for your retirement, IRAs (Individual Retirement Accounts) are a solid option – but how can you know which company is best to trust with handling your IRA account?
Choose the Model that Fits Your State of Mind
First of all, you need to figure out what you want and what you need. There are several types of institutions that are into the IRA handling game, ranging from banks and insurance companies to brokerage firms and mutual funds. There is a lot of wealth handled on IRA accounts. The total assets in US IRA accounts rose from $6.25 billion in 2015 to almost $7 billion in 2016, but remember that you can put as much as $5,500 annually into your IRA. Each option fits a different type of investor: If you want to play it safe and have a guaranteed income in the end, you might opt for an IRA with annuity at an insurance company (but not taking full advantage of the tax privileges that come with it). Or you can go for a certificate of deposit with your IRA at a bank (and lower investment returns).
If you want to be flexible and can tolerate some risk if it means better returns, then you'll want to go with a brokerage firm. There are options there too: You can go for a self-managed IRA if you want more autonomy and control, or you could choose a robo-advisor that manages the IRA account on your behalf for a small fee. The second option won’t leave you much room for wiggle and executive decisions on where to invest – but some people prefer it that way. While you are out looking for a firm (our reviews can help with that), consider how much diversification you’d want in your portfolio. IRA accounts are a great way to invest in up and coming options like cryptocurrencies while enjoying the tax benefits of a retirement account.
Choose Based on Reputation and Professionalism
Once you have narrowed down the specific market you are looking into, consider your options based on reputation. Investigate how the companies you're considering handle client feedback and what their response time is – that will give you a good indication of how seriously they take your satisfaction as a client. As your firm will be handling sensitive personal data like your financial information, you also need a company that has a firm grasp on cybersecurity. The right candidate will have proper tools in place like a web application firewall that protects online applications by filtering out malicious requests and stopping hackers from stealing your data. As more and more companies provide web-based tools for their clients, such security tools are increasingly important. Whether your company is up to speed in terms of cybersecurity is not just an indication of professionalism, but it can potentially make the difference between having your data stolen and knowing it's safeguarded.
Make sure that your firm of choice knows how to handle your finances - not only when it comes to investments, but that they have an overall professional way of conducting business. How many years is the company you are considering active in the field? Experience is crucial when managing an IRA account and the number of clients, the range of services provided, and the ratings that the company gets from industry watchdogs like the BBB are all factors to consider. Last but not least, consider their fees (our advice is to always go with flat annual fees to avoid surprises) and how transparent they are about their rates and extras. You need to make sure that everything is clear before you sign with them.
Finding the best company to handle your IRA account is not the easiest job. You need to do your research and be honest about your needs. But the peace of mind that comes with knowing you made the right choice is invaluable.