Unlike a pension, 401(k), or 403(b) plan, which give you little to no say on your investment options, an IRA lets you invest in whatever stocks, bonds, mutual funds, ETFs, and other assets you want. But the dizzying array of investment options can be overwhelming.

You can manage your IRA’s investments by working with an online broker or a robo-advisor.

• An online broker will provide a wide-ranging menu of investment options. They can help you set up your account and answer questions, but you are responsible for choosing what to invest in.

• A robo-advisor is an algorithm-driven investment platform. It will ask you a series of questions to identify your financial goals, time frame and risk tolerance – then it will select and manage your IRA investments for you based on your answers.

You can open an IRA at a brokerage firm such as Charles Schwab or Fidelity, as well as at some banks, mutual fund companies, or life insurance companies.

Look for factors like management fees, investment minimums, available investments, planning tools, educational resources, and customer service. Some IRAs even match your contributions up to a certain amount.

There are two main types of IRAs, each with different tax implications:

• Traditional IRA. You contribute money pre-tax, which brings down your tax liability now – but when you withdraw your funds later, those payments are taxed. This could be preferable if you will be in a lower tax bracket at retirement. You can start withdrawing from an IRA at age 59½, and you must start withdrawing by age 73. Withdrawals before age 59½ are subject to a extra 10% tax penalty.

• Roth IRA. You contribute money after-tax. You can’t withdraw funds for five years, but then you can withdraw the initial contributions tax-free and penalty-free as long as you meet certain requirements. After age 59½, all withdrawals are tax-free.

Usually you open an IRA account online. You’ll need personal documentation to prove your identity as well as financial information such as your bank account. 

Once your account is set up, you can fund it in a variety of ways:  

• Roll over a 401(k), or 403(b) retirement account from a previous employer or roll over funds from a different IRA account. 

• Transfer funds from your bank account one time or set up auto-transfers 

You can contribute up to $7,000 to an IRA account in 2025, with an additional catch-up contribution of $1,000 for people ages 50 and up.