I've found that the easiest way to be consistent with investments is to do it automatically. An IRA, of course, is just the basket that holds your investments, so I've been researching convenient ways to participate in online trading where I have access to mobile trading and an online broker.
Here are some things I've learned while researching IRAs:
- Stock trading isn't your only option for investing inside of an IRA. You can also invest in bonds, mutual funds, as well as other assets such as real estate.
- You pay taxes on the back end with a traditional IRA (when you withdraw the money in retirement), but pay taxes on the front end when you invest in a Roth IRA. Both accounts grow tax free while the money is in the account.
- There are income limits for contributing to a Roth IRA.
- Roth IRAs are more flexible. You can withdraw some of the money early, and can leave the money in there for as long as you want. With a traditional IRA, you are required to start withdrawing money by the age of 70 1/2.
- SIMPLE and SEP IRAs are other options for small business owners and those who are self-employed.