Fees associated with an IRA can quickly diminish investment returns and raise the risk of running out of money in retirement. Therefore, it’s essential to understand exactly what it is you are paying for in return and get value in exchange.
Research by Pew shows that those who convert their 401(k)s into IRAs could incur billions in additional fees over decades, according to research conducted on this topic. Here is what you need to know before investing.
Betterment
Betterment offers an impressive suite of digital financial tools at no account minimum cost, making it an excellent option for new investors. Furthermore, Betterment allows users to link external investments and retirement accounts for a comprehensive overview of their goals and progress toward them as they invest money into the market – this holistic approach reduces fees while increasing return.
Betterment stands apart from its counterparts by not charging wrap fees or ongoing management charges, and also provides tax-coordinated portfolios, which aim to minimize taxes by allocating highly taxed investments toward tax-deferred accounts and less-taxed ones towards taxable accounts.
Betterment offers competitive annual management fees of just 0.25% of your account balance or $4 per month for accounts with $250 in monthly recurring deposits or more, and offers savings accounts with attractive interest rates as well as pre-built portfolios to make investing easy for first-time investors. Its educational approach and low costs make Betterment one of the top robo-advisors available today.
Wealthfront
Wealthfront is one of the more sought-after robo-advisors, providing comprehensive services at an attractive cost. Their management fee is 0.25 percent while IRA accounts can be opened free. Furthermore, there is also a cash account offering competitive interest rates as well as comprehensive financial planning software available through Wealthfront.
This company provides three investment options, such as Classic portfolio, Socially Responsible portfolio and Direct Indexing for accounts with at least $100,000 in taxable assets. All three use Modern Portfolio Theory with algorithms automatically diversifying assets without needing to select individual securities individually.
Wealthfront allows you to customize your investment plan by adding specific investments or selecting an asset allocation target. Their website also features useful educational content on topics like taxes, financial planning and account types; their diversified ETFs offer tech innovation stocks like dividend and growth stocks while emerging markets ETFs protect against inflation-protected bonds are also featured on Wealthfront’s platform. Plus they have a Portfolio Line of Credit allowing a loan against your portfolio at rates lower than most home equity lines of credit!
Charles Schwab
Schwab is a leader in the $10 trillion IRA marketplace, offering traditional, Roth, SIMPLE and SIPPLE IRAs to investors of all kinds. Additionally, this firm provides investors with a competitive selection of mutual funds and ETFs, featuring $0 trading commissions, sophisticated platforms and research tools, low minimum fund options and even its Schwab Advisor Network that prescreens advisors based on experience and credentials.
Custody fees associated with an IRA account can significantly eat into its value over time, typically being charged by traditional financial planners and robo-advisors; these costs tend to be less costly than management fees.
Charles Schwab offers an impressive variety of services, such as cash management accounts and market news coverage. Their website showcases articles written by their team of financial planning, investing, and trading experts as well as videos featuring these resources. In addition, there is also a knowledge center with educational material regarding retirement savings plans and asset allocation strategies.
Fidelity
Fidelity offers a convenient and user-friendly platform to invest your IRA. Their five-star broker boasts an intuitive user experience with helpful customer representatives, competitive fees and an array of investment assets available for purchase. Plus they don’t charge typical bank fees like stop payment and ATM charges!
Fidelity’s IRA account offerings span standard accounts, health savings accounts (HSA), 529 education savings accounts and more. They offer an array of investment options such as stocks, ETFs and mutual funds as well as precious metals investments, IPOs and robo-advisors to suit different investment preferences.
Fidelity has earned a reputation for its investor-friendly services, cutting almost all fees to make investing simpler for its clients. Offering commission-free stock and ETF trades with low fees has made Fidelity one of the leading online brokers, as have its commission-free stock and ETF trades as well as zero cost IRA mutual fund fees – not forgetting no cost options trades and an extensive library of research materials.
