Where Should I Put My IRA Money Now?

Banks, mutual fund companies and online brokerages often offer Individual Retirement Accounts (IRA). When selecting one to open, be sure to compare fees. Ideally you should find one offering no-load mutual fund families or an robo-advisor offering various strategies such as target date funds.

Asset allocation is crucial to your future earnings. An IRA was intended for retirement; any withdrawals prior to age 59 1/2 will incur taxes and a 10% penalty fee.

Target-date funds

Your answer depends on both your risk tolerance and how close you are to retirement. If you need guidance, target-date funds (also referred to as lifecycle or dynamic risk-based funds) provide one easy solution that balances growth with stability over an investment horizon of one lifetime.

As investors get closer to their anticipated retirement date, their funds become more conservative by gradually transitioning away from stocks toward bonds and cash – this transition process is known as the glide path.

However, you should keep in mind that all investments involve some degree of risk, even though bonds tend to be considered less volatile than stocks. Furthermore, target-date funds are technically “funds of funds”, meaning they invest in other mutual or exchange traded funds which in turn charge fees which eat into your overall returns; some target date funds do offer low costs though.


IRAs can be powerful investments because they enable you to save without incurring taxes until it comes time to withdraw the money in retirement. The earlier you begin contributing to an IRA, the greater its compounding effect will be.

Choose among individual stocks, mutual funds, exchange-traded funds (ETFs), or robo-advisor portfolio management services for investing. Bonds and CDs also provide safe investments, though their return tends to be low and don’t provide much growth potential.

Fidelity’s Traditional or Roth IRA accounts offer investors access to a broad array of investments with no minimum deposit requirement and full-featured trading app with fractional shares available for purchase. Furthermore, there are no backend account fees and some of the lowest trading commissions in the industry; plus a network of Investor Centers providing face-to-face guidance as well as industry leading financial planning tools and target date funds that automatically diversify investments as you move closer towards retirement.


Your choices in an Individual Retirement Account depend on factors like how close to retirement you are, your risk tolerance and current financial status. For instance, if you already have a 401(k), consider saving in an automatic target-date fund which automatically adjusts according to time horizon and risk profile.

Your IRA is an excellent place to hold tax-efficient bond funds, since outside it you would pay tax on any interest earned as ordinary income whereas within it it can remain protected from this.

Some IRA providers provide automated robo-advisors that manage your account and offer you a diversified portfolio, but you should also explore other options like Interactive Brokers’ brokerage platform – featuring low fees and access to worldwide markets as well as offering special accounts such as SDIRAs for holding nontraditional assets such as cryptocurrency or precious metals.

Money market

Money market investments offer a safe way of protecting your savings. This category encompasses short-term securities like Treasury bills, certificates of deposit (CDs), commercial paper and repurchase agreements which are traded on wholesale markets.

These securities typically pose low risks, being either FDIC-insured or supported by banks or governments. Furthermore, they’re extremely liquid so you can easily withdraw cash at any given time.

Money market accounts offer interest rates that closely track those set by the Federal Reserve; as such, their interest rates have steadily risen over time.

As long as your IRA is traditional or Roth, investing your savings in stocks or a combination of stocks and bonds could give you significantly higher returns than investing only in cash. Depending on your time horizon and risk tolerance, an all-stock portfolio could work just as well or a balanced approach which includes both stocks and cash investments may be suitable.

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