How to Open an IRA: 5 Easy Steps to Secure Your Future
Retirement can feel like it’s far off or something irrelevant to how people live their lives today. That’s why it’s better to think of an IRA as an Individual Reinvention Account – your chance to build toward the freedom to choose to do what you love to do instead of what you have to do.
You’ve learned the basics of a traditional IRA. Now, here are the five easy steps to open your Aspiration IRA.
1. Is an IRA Right for Me?
Almost certainly “yes.” It’s important to note that there are different kinds of IRA accounts. Aspiration is offering traditional IRAs because:
- Investing in a traditional IRA can save you money - income you place into a traditional IRA may be eligible for a tax deduction
- You can invest in a traditional IRA tax-free - your money is sheltered from taxes until you withdraw it at retirement time and taxes don’t have to be paid until withdrawal
In short, a traditional IRA gives you a chance to grow your money through investments without requiring you to pay taxes on that money today and it can make you eligible for a deduction on this year’s tax bill. That’s a one-two punch on taxes, saving you money today and when you retire.
The traditional IRA is also a great way to ensure that you’re building funds for the future, whether or not you have employer-sponsored retirement accounts at your disposal. And with the ability to automate that investment, you can build a habit of investing your money without having to worry about it on a daily or monthly basis.
2. Do I Qualify for a Traditional IRA?
Probably “yes.” It’s pretty easy to qualify for a traditional IRA. All you have to do is be over 18 and under the age of 70 ½ and receive taxable income. And if you’re married and your spouse is the sole breadwinner, you can still qualify for a traditional IRA if your spouse meets the criteria above.
3. How Much Money Do I Need to Get Started?
Very little. At Aspiration, we make our investment products available for an initial investment of as little as $100.
Even if you have only $100 to contribute to your IRA, it’s still important to get into the habit of putting that money into an account that is tax-deferred and can be used to build up money for the long run. And you can set up a recurring deposit to your Aspiration IRA timed to take a small amount out of each paycheck over the course of the year.
While there is no minimum, there is a maximum amount to invest. The maximums are changing as laws change, but right now you can’t contribute more than $5,500.
4. Why Should I Open an IRA with Aspiration?
There are many investment firms and banks that allow you to invest in a traditional IRA. Aspiration is just one of them. So why is an Aspiration IRA special?
Opening an IRA with Aspiration’s sustainable investing approach means you are investing for the long term with companies that think about the long term.
Sustainable Retirement Investing
An Aspiration IRA gives you the option of saving for your retirement while you save the planet at the same time. Opening an IRA with Aspiration’s sustainable investing approach means you are investing for the long term with companies that think about the long term. These “High Road” businesses prioritize the environment and their employees, they focus on diversity and good governance, and because of that they have been found to be more profitable and more valuable as investments over time.1
If you care about the impact of your dollars when it comes to buying coffee or clothes, just imagine the impact of your money in championing companies that are sustainable in terms of their corporate values and their investment value over time.
With a traditional sustainable IRA from Aspiration, you can double your peace of mind. You’ll feel good about your financial decisions and feel good that your investments don’t support fossil fuel companies or firearm manufactures but instead encourage the businesses that are doing what’s right.
The wealthiest Americans have ways to invest with less volatility allowing them to make money over the long run while being spared the worst of the stock market’s roller coaster. However, many everyday investors end up with IRAs invested in traditional mutual funds or index funds that often see huge ups and downs. This can not only harm your ability to grow your investments, but – if the timing is off – it can radically change your life. Many Americans at or near retirement age in 2008 saw much of the funds in the retirement accounts they were counting on vaporize when they needed them most.
We believe that the shortest way to financial security is a straight line, Aspiration offers the ability to include lower volatility investments in your IRA. With these strategies, you can see more steady results in your investments and the potential for greater returns when you need them most.
5. How Do I Open an Aspiration IRA?
It’s as easy as A—B—C.
Assess – Is an IRA right for you? If you have at least $100 to save or invest and haven’t yet opened an IRA, chances are that there are tax and investing advantages to putting those dollars in an IRA.
Budget – How much can you afford to invest in an IRA to start? How much can you afford to add each month or from each paycheck? Remember that not only is a traditional IRA investment protected from current taxes, but you get a tax refund for each year your invest in your IRA.
Click – Click here to open your IRA immediately. In less than five minutes, you can not only be on your way to a more secure financial future, but you’ll also have money coming your way from the federal government – potentially hundreds of dollars on which you will otherwise miss out.
Hypothetical examples have been provided for illustrative purposes only and are not intended to represent performance of an Aspiration IRA. Contribution limits could be lower based on your income or other investments. Please visit our FAQs for more information on IRA contribution limits. This information should not be considered legal or tax advice. Please make sure you understand the tax consequences before making an investment.
1. Eccles, Ioannou, and Serafeim, The Impact of Corporate Sustainability on Organization