How to Open an IRA in 4 Steps

Nerdy takeaways

You can open an IRA at an online broker or an online advisor, called a robo-advisor.
There is no age limit for opening or contributing to an IRA, as long as you have a source of earned income.
An IRA isn't an investment — it's an investment account. Once open, you'll need to fund the IRA and choose investments.

Individual retirement accounts are important tools that help you save and invest for retirement. Unlike 401(k)s, which are largely accessed through workplace programs, virtually anyone can open an IRA.

1. Decide whether you want to manage your own IRA

How would you like to grow the money in your account — hands-on or hands-off? Your answer will help determine whether you should set up an IRA with an online broker or a robo-advisor.

» Want a shortlist for starting your IRA? View our picks for the best IRA accounts

Opening an IRA at an online broker

If you want to be hands-on by choosing and managing your own investments, you’ll need an online broker. After opening your account and funding it, you can select what investments you'd like your money to go towards — typically mutual funds, stocks or bonds.

When comparing brokers, these are some features to consider:

Low to no account fees.
A wide selection of no-transaction-fee mutual funds and commission free exchange-traded funds.
Solid customer support that aligns with your time zone, or has weekend availability
Educational resources, especially if you're a new investor.

» Our guide for how to invest your IRA

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Opening an IRA at a robo-advisor

If you’d like an automated way to manage your investments, consider a robo-advisor. A robo-advisor will choose low-cost funds for you based on your retirement timeline and risk tolerance for a fraction of the cost of hiring a human financial advisor. Robo-advisors are great for those who want a professional to handle the investment decisions. Look for one with a low management fee and services that meet your needs. Automatic rebalancing and portfolio management are usually standard, but other features can vary by provider.

🤓Nerdy Tip

You may wonder why a bank isn't mentioned here — banks do sometimes offer IRA accounts, but they typically don't offer access to stock market investments, which is what most retirement investors will want. With a bank IRA, generally, you'll likely be limited to a type of savings vehicle or fixed-income option such as a certificate of deposit (CD). These offer a much lower rate of return than, say, a stock and bond portfolio might enjoy and may not outpace inflation over time. For a long-term goal like retirement — where you have the time to let your account ride out any market declines — it makes sense to invest for growth.

2. Open your IRA account

The actual steps involved in opening an IRA will vary slightly by provider, but the process itself is pretty straightforward. In general, you’ll head to the provider’s website or mobile app, choose the type of IRA you want to open (Roth or traditional) and fill in some personal details such as your Social Security number, date of birth, contact information and employment information.

3. Fund your IRA

Once you've opened the account, you'll see your options for funding it.

When it comes to retirement, starting with any amount early on is better than nothing — and you don't have to fund it all at once. A common strategy, known as dollar-cost averaging, is to make regular contributions at set intervals. For example, perhaps you stash away $100 per month in your IRA.

Just remember that IRAs have annual contribution limits of $7,000 in 2025 ($8,000 if age 50 and older). You don't have to contribute that much, but you can't contribute more than that limit. These limits are shared across IRAs, so if you have both a Roth IRA and a traditional IRA, you’ll need to keep your total contributions at or below the maximum.

Contributing to an IRA from a savings or checking account

If you want to contribute to your new IRA account from a bank account, you’ll need your account number and routing number. If you’re just starting out, it may be helpful to set up automatic transfers.

Contributing from another investment account

You can also transfer assets from an existing IRA — say you want to change account providers — into your new IRA, or you can contribute from a taxable brokerage account.

If you have a 401(k) from an old job, you can move those funds into an IRA by doing a 401(k) rollover. For many people, rolling over into an IRA is a convenient option — IRAs tend to have a wider array of investment choices.

The IRA provider will help you do this — many have “rollover specialists” on staff — but the basics are simple: You’ll contact your former employer’s plan administrator and complete a few forms, and they will send your account balance (via check or by wiring the funds) to your new provider.

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4. Choose your IRA investments

If you decide to use a robo-advisor for your IRA, you don’t actually need to choose your investments. Your robo-advisor will ask you for your goals and preferences and select investments that match up with them, and even adjust those investments over time.

If you’re going the hands-on route with an online broker, consider building a portfolio out of low-cost index funds and ETFs. This approach makes it easier to ensure adequate diversification in your portfolio (which lowers your investing risks) and helps minimize the fees you’ll pay.

Frequently asked questions about opening an IRA

What is the minimum to open an IRA?

The IRS doesn't require a minimum amount to open an IRA. However, some providers do require account minimums, so if you've only got a small amount to invest, find a provider with a low or $0 minimum. Also, some mutual funds have minimums, so you need to account for that as you choose your investments. But many investments have no or a low account minimum. Focus on those if you're on a tight budget.

How much does it cost to open an IRA?

There isn't typically an opening fee, though there are a few potential up-front costs. Some brokers and robo-advisors require a minimum amount to open an account, so you'll either have to come up with that dollar figure or choose a different provider. You'll also need enough money to purchase investments you want in your IRA. Some brokers also charge trading commissions when you buy or sell investments. If you invest in mutual funds or ETFs, you'll pay an expense ratio and possibly other fees as well.

What do I need to open an IRA?

When opening an IRA, you'll typically be asked to provide information such as personal identification, your Social Security number, employment information, and a funding source like a bank account.