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This Web site contains a compilation of more than a thousand consumer finance  columns written by Tony Novak from the 1980s through 2006, updated and reformatted for maximum usefulness today.  New material was added after 2010.

Content is the opinion of the author and does not represent the position of any other person or entity. Information is from sources believed to be reliable but cannot be guaranteed.

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Starting an individual retirement account (IRA)

originally posted: 11/22/2006  reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If in doubt, please send a new question or ask for an update.

Q: I want to start an IRA but I never seem to have enough money to open an account. I am worried that I waited so long to get started and still never seem to be able take the first step. Can you help?

A: Yes, the important thing is to get started now with any amount. Do not wait any longer to get started. Once you begin investing, the rest will take care of itself. This is especially important now that IRAs are not just for retirement anymore. IRAs also provided an an important financial cushion for a first home purchase, education expenses and uncovered medical expenses. We can offer at least three new options that can help. First, the brand new 2006 Pension Protection law now allows employers to withhold voluntary employee deductions to be deposited directly into an IRA account. We can set this up through your employer's payroll system on request. Even if your employer is not willing to offer this option, a second option is available with some investment companies that allows you to start an IRA with an automatic monthly deposit of $25 or more from your personal checking account. OnlineAdviser can set up either of these accounts at no additional charge with an initial personal financial planning consultation. Investment companies waive their minimum initial investment as an accommodation to a financial adviser to allow you to get started. Their logic is that anyone serious enough about their finances to be working with a professional financial adviser will build up to the minimum account size quickly. A third option, available for the first time this year, IRS allows your tax refund to be deposited directly into an IRA account. Just mention this with your tax return preparation request and we will automatically attach Form 8888 to your return and set up a low cost IRA account with no-load investment options. In your initial financial planning consultation we should focus on ways to maximize your tax refund this year and then use those savings to jump-start your retirement savings account. The fee for this service is $150 but you will likely see a return many times larger for this investment. See for details and to place a request for OnlineAdviser assistance.


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