Instructions

1

Choose the type of retirement account for you. You may elect a traditional IRA or a Roth IRA. A traditional IRA defers taxes until retirement. A Roth IRA offers a tax-free retirement income, since you pay taxes on it when you contribute. Other options include a SIMPLE IRA, Trust Account or group IRA, Individual Retirement Annuity, Rollover IRA, Inherited IRA and an Education IRA.
2

Find out and understand the rules of an IRA. Know the rules of contributions, distributions and the exceptions. You can start receiving distributions at age 59? and you must start taking your distributions by April 1 after your reach 70?. You cannot make any contributions after age 70?.
3

Compare the IRA products available. Find out the commissions and brokerage fees charged. When you shop around, ask questions. You want to find out if they require a forced distribution from the IRA. If you have more than one account, you may want to take the distribution from one account only.
4

Make a deposit with an IRS-approved custodian. This includes a bank, savings and loan, mutual fund, insurance company, stockbroker or employer. You may only use cash to open an IRA account.
5

Decide what types of investments to make within your IRA account. Consider stocks, mutual finds or an index fund. Research your options. Talk to a financial professional for more ideas.
6

Keep your IRAs manageable. Organize your IRAs if you have several accounts. You need to keep track of your distribution deadlines.
7

Leave your money in a retirement account when you leave your job. Early withdrawal earns a 10 percent penalty, but you can transfer an old 401K from your last employer into an IRA or into your new employer's plan.