What To Do If Your IRA Is Costing You Too Much Money? 7 Tips

In recent years, shifting savings from traditional 401k retirement accounts into individual retirement accounts (IRAs) have become increasingly popular. IRAs offer more investment options and greater flexibility when it comes to withdrawing money.

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However, there are some downsides to having an IRA. One of the biggest is that they can be expensive. Fees and expenses can eat into your returns, and if you’re not careful, you could end up paying more than you need to.

Here are 7 useful tips to help keep your individual retirement account costs down:

Shop around for the best deals

When it comes to investing, fees matter; just a 1% difference in fees can have a big impact on your returns over time. The same is true for IRAs. Be sure to shop around and compare fees before opening an account.

Avoid high-cost investments

There are some investments, like actively managed mutual funds, that come with higher fees. If you’re not careful, those fees can eat into your returns. Consider index funds or exchange-traded funds, which tend to have lower fees.

Keep an eye on your expenses

Once you have an IRA, it’s important to keep track of your expenses. Many brokerage firms offer online tools that can help you track your costs. And be sure to review your account statements regularly to make sure you’re not being charged any hidden fees.

Consider a Roth IRA

If you’re looking to keep your IRA costs down, you might want to consider a Roth IRA. With a Roth IRA, you don’t have to pay taxes on your withdrawals in retirement. This may save you a lot of money down the road.

Consider a Robo-advisor

If you’re not comfortable managing your own investments, consider using a Robo-advisor. A Robo-advisor can help you select investments and manage your account for a lower cost than traditional financial advisors.

Stay invested for the long term

If you’re worried about fees, one of the best things you can do is stay invested for the long term. The longer you remain invested, the more time your assets have to grow. And over time, the impact of fees on your returns will lessen.

Keep an eye on required minimum distributions

Once you reach age 70 1/2, you’ll be required to take the required minimum distributions (RMDs) from your IRA. Be sure to calculate your required minimum distributions for IRA beneficiaries carefully, as taking too little can result in a penalty.

Reduce IRA Costs and Free Up More of Your Hard-Earned Money

If you are feeling burdened by the fees your IRA is costing you, there are steps you can take to lower those expenses. Review your investment options and make changes where necessary.

Talk to an expert about whether a Roth IRA might be a better fit for your needs. And most importantly, don’t forget that it’s never too late to start saving for retirement.

With these seven useful tips in mind, you should be well on your way to finding an IRA that works best for you and your budget.

Author Profile

Adam Regan

Deputy Editor

Features and account management. 3 years media experience. Previously covered features for online and print editions.

Email Adam@MarkMeets.com