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Shrink Your Taxes. Grow Your Retirement.
Learn how an IRA can help you do both — in just minutes.
Why open an individual retirement account (IRA)? There are numerous reasons, but here are two of our favorites.
1. Save on taxes
Because contributions to an IRA are tax-deductible, an IRA can trim your tax bill — all the way up to tax day itself.
Maybe the best part: You can lower your tax bill all the way up to the day you file your return, simply by opening and contributing to an IRA.
*Assumes a single filer age 49 or younger earning the median U.S. household income of $57,617 and paying a marginal income tax rate of 25%. Results will vary depending on your specific financial situation. See the table below for some general guidelines on IRA eligibility.
Traditional IRA deduction limits for 2017
| Filing status | 2017 modified AGI | Tax deduction |
|---|---|---|
| Married filing jointly or qualifying widow or widower |
| Full deduction up to contribution limit |
| Partial deduction | |
| No deduction | |
| Single or head of household | $62,000 or less | Full deduction up to contribution limit |
| More than $62,000 but less than $72,000 | Partial deduction | |
| $72,000 or more | No deduction | |
| Married filing separately | If you or your spouse is covered by a workplace retirement plan: Less than $10,000 | Partial deduction |
| If you or your spouse is covered: $10,000 or more | No deduction |
2. Boost your savings
The tax savings is a nice immediate perk, but the main benefit of an IRA is the way it helps you save for your future.
Provided you meet eligibility requirements, you don’t pay taxes on your contributions or your investment earnings until you withdraw your money in retirement. And every year until then, you can add another $5,500 ($6,500 if you’re 50 or older) — without paying taxes until you retire or otherwise withdraw the money.
Ready to get started? You can browse providers below to find the right place to open your IRA.
Standout IRA providers for DIY investors
With low costs and advanced research tools, these brokers are perfect for those who want to manage their own portfolios.
Broker | Highlights | Commissions | Account Minimum | Current Offers | Start Investing |
|---|---|---|---|---|---|
Merrill Edge | Breadth of research; strong educational offerings | Commissions $0 per trade | Account Minimum $0 | Current Offers Up to $600 cash credit with qualifying deposit | on Merrill Edge's secure website |
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TD Ameritrade | A well-rounded online brokerage with top research and educational content. | Commissions $0 per trade | Account Minimum $0 | Current Offers None no promotion available at this time | on TD Ameritrade's secure website |
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E*TRADE | Large selection; low fees | Commissions $0 per trade | Account Minimum $0 | Current Offers $50 or more when opening an account, with code: WINTER21 | on E*TRADE's secure website |
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Standout IRA providers for hands-off investors
Put your investments on autopilot. These robo-advisors offer portfolio management — informed by computer algorithms and your personal investing preferences — at an affordable rate.
Broker | Highlights | Commissions | Account Minimum | Current Offers | Start Investing |
|---|---|---|---|---|---|
Betterment | Offers access to human advisors for additional fee. | Commissions 0.25% management fee | Account Minimum $0 | Current Offers Up to 1 year of free management with a qualifying deposit | on Betterment's secure website |
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Wealthfront | Free management of first $5,000 (for NerdWallet readers); advanced tax optimization strategies. | Commissions 0.25% management fee | Account Minimum $500 | Current Offers $5,000 amount of assets managed for free | on Wealthfront's secure website |
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Wealthsimple | Socially responsible investments; free tax-loss harvesting | Commissions 0.40% - 0.50% management fee | Account Minimum $0 | Current Offers None no promotion available at this time | on Wealthsimple's secure website |
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Want to see more providers?
Review our rankings of the top IRA brokerages of 2018.
Need more resources?
See our library of IRA FAQs to find answers to your questions.
How much can I contribute to an IRA?
How is an IRA different from my 401(k)?
Should I consider a Roth IRA instead of a traditional IRA?
What do I need to open an IRA?
