Setting up an IRA involves understanding account types, investment minimums, and selecting a provider. Follow these steps to open your IRA quickly.

Opening an IRA is simple: choose an account type (Roth or traditional), complete the application, fund it, and invest.

However, details can become tricky: What are the contribution limits? Which IRA type suits you best—Roth, traditional, or rollover? What investment options should you select? Which financial institution will you use?

When choosing a provider, here's the honest insight from years of reviewing options:

Reputable brokers are reliable: If the firm is well-known—like Fidelity, Charles Schwab, Vanguard, TD Ameritrade, Merrill, or E-Trade—you're making a wise choice. The same goes for robo-advisors like Betterment, Wealthfront, and Ellevest.

Ensure they offer the essentials: Look for these must-haves when selecting an IRA provider: 1) SIPC insurance for theft or fraud protection (investment losses are not included). 2) A variety of low-fee investment options (index funds, ETFs, stocks, bond funds, etc.). 3) Optional services (like portfolio management, planning tools, or personal advice) at a reasonable cost.

Switching is hassle-free: If you're unhappy with your service or want a different level of support, transferring your IRA elsewhere is straightforward. The new company will assist throughout the transition.

4 Steps to Open an IRA

To open an IRA, you'll need basic identification (Social Security number, contact info) and funding details (check or bank routing number). Don't stress about initial deposit requirements; many institutions don't have minimums. When you're ready to invest, follow these steps:

1. Select an IRA Account Type

Your first step is choosing the type of IRA. The primary options are a traditional IRA or a Roth IRA. IRS guidelines will dictate your eligibility and contribution limits.

If you're transferring funds from another IRA or an old 401(k) or 403(b), you'll need a rollover IRA. With this type, you can transfer the full balance without contribution limits, as long as you keep the same account type (e.g., a Roth to a Roth).

There are additional IRA types available depending on your needs (like SEP and SIMPLE IRAs for freelancers or small business owners). Confirm availability with your chosen provider.

2. Complete the Application Forms

You'll provide basic details to create your account: name, address, birthdate, Social Security number, and similar information for beneficiaries. You may need to disclose details about your employer.

3. Fund Your Account

The IRS allows a maximum annual contribution of $6,000 for those under 50 and $7,000 for those 50 or older in 2019 and 2020. Don't worry about paying the full amount right away; most brokerages have no minimum for IRA accounts. You can contribute anytime. Make sure to fund your IRA before your tax deadline (July 15 for the 2019 tax year).

The easiest way to fund your IRA is via electronic funds transfer. Just have your account and routing numbers ready to move funds from your bank. You can also set up automatic transfers for gradual contributions.

If rolling over from a 401(k) or other workplace plan, your new provider will guide you through the process to ensure compliance with IRS regulations. You'll perform a direct transfer to maintain the tax-protective status of your IRA.

4. Choose Your Investments

Funds in your IRA won't be invested immediately. Remember, an IRA is simply a holding account for your investments. If you don't make selections, funds may remain in cash or a cash-equivalent. You'll want to start investing your money quickly to take advantage of growth potential.

Investing can be straightforward with a target-date mutual fund, where your funds are diversified based on your age. The investment strategy becomes more conservative as you approach retirement.

If you prefer a hands-off approach, consider a robo-advisor. These services automatically select a suitable mix of investments based on your goals and risk tolerance. Many major brokerages and some dedicated robo-advisor firms provide affordable automated IRA management.

The Key to Opening an IRA

Just take the plunge. Women, in particular, shouldn't hesitate or overthink the process. As mentioned, switching providers is simple if you change your mind.