Do I Need Help Managing my Roth IRA?

The amount of help you need and the type of assistance you require with a Roth IRA depends on your financial experience and your confidence in directing your own investments. When you open a Roth IRA, your custodian, or the financial institution that holds your account, will be available to help you manage the investments in your Roth IRA, answer your tax questions and assist you with transactions. If you need additional help deciding on your best IRA options, consider meeting with a professional investment advisor to discuss your financial goals.

Seasoned investors with a strong knowledge of the tax requirements of Roth IRAs may require little or no help allocating their assets or selecting investments for a Roth IRA. However, you must have a trustee or custodian handle the basic operations of the account, according to IRS regulations. A trustee or a custodian may be an investment firm, a bank, a savings and loan, a credit union that's insured by the federal government.

Basic Roth IRA Management

Managing a Roth IRA doesn't have to be a complicated process. If you choose a reliable bank, credit union or investment brokerage to hold your account, you should receive plenty of information and advice from these professionals on how to manage your contributions and when to collect distributions. After you open a Roth IRA, you may make contributions up to the maximum annual limit from your aftertax income. If you exceed your allowed contributions, you may be subject to a penalty.

If you have questions about how much you can contribute in any given tax year, whether you can roll over an employee retirement plan to a Roth IRA or what to do with a Roth IRA that you've inherited from a family member, your custodian can help you with these questions. You can also find information about managing a Roth IRA by consulting IRS resources. The IRS provides detailed instructions on the basics of Roth IRA management online.

The level of investment management provided by a financial institution may vary considerably. If your account is managed by an investment firm, your trustee may have a much more active role in asset allocation and transaction management than a bank or savings and loan. For some investors, having this assistance is a valuable benefit of working with a brokerage. Professional investment brokers draw from extensive education, training, experience and financial resources to make decisions about managing your funds.

Making Investment Decisions

When you open a Roth IRA, you may be overwhelmed by your investment choices. As the account holder, you have the option to allocate your assets in a way that corresponds with your investment goals. Many investors prefer to have the guidance of a professional when making decisions about their retirement accounts. Investors with substantial financial experience may prefer a self directed Roth IRA. A self directed account is held and operated by a trustee or custodian, but the account holder has the primary responsibility of managing his or her investments.

By defining your objectives as an investor and assessing your level of risk tolerance, you may find that it's easier to decide if you do need help you need managing a Roth IRA. If you're preparing to retire and you need an accelerated investment plan, or you're an investor who likes to take risks in order to earn maximum returns, having the advice of a professional may help you reach your targets in the right time frame. If you simply want to make regular contributions until you reach retirement age and you're a conservative investor, you may not need any assistance other than the help of your trustee.

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