Managing Your Own IRA

An Individual Retirement Account (IRA) is an investing tool that can be funded only through cash transactions. Usually, an IRA is funded with a broker steering the ship. But, it is possible for you and your partner to manage your own IRA without the need for someone else to make key decisions about your financial future. While managing your own IRA requires a lot of homework and knowledge, it can ultimately lead to greater returns in the long run.

Step 1

Open a brokerage account, but make sure to clarify that you wish to use it without a broker. Some firms will not let you do this. Look at the fees associated with this, and shop around for the type of IRA that will work for you and your budget.

Step 2

Attach your brokerage account to a checking account. All assets purchased through your IRA must be done via cash assets. Linking your brokerage account to either your joint checking account or an individual account will make it easy for you and your partner to make cash transfers when purchasing new investments through your IRA.

Step 3

Make an investment plan. Before purchasing any investments, sit down with your partner and discuss where you want to go with your IRA account. Study the various stock and investment options at your disposal. Know the various tax laws. Understand the $5,000 contribution limit. You are saving for your retirement, so treat it with the seriousness it deserves. But, understand that there may be setbacks beyond your control. So, know what you are getting yourself into and be knowledgeable enough to make a move if things go south.

Step 4

Purchase the investments that you and your partner have agreed on making. Be sure to do so knowing the tax implications that come with investing. Never go beyond your means. You are purchasing for your future, but there is no need to go broke in the present to do so.

Step 5

Check your brokerage account on a regular basis. While there is no need to check on a minute by minute basis, it’s important to keep up to date with how your investments are doing. Some brokerage firms allow for daily email updates. Even with those, you should still take a look at your account often to make sure all of your investments are healthy and stable. Keep up to date by increasing your knowledge about what you have invested in and what you plan on investing for in the future.

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