Overcome Your Inertia: Set up your IRA
January 28th, 2008 | by Molly's Brother |I think I have created a central theme to 2008: It’s year when I will overcome my inertia. I think we are all beholden to a level of inaction to varying degrees and in different circumstances. For example, there are some of us out there who, for whatever reason, have still not acted in establishing and funding an IRA. They know they should. They want to. But the idea of how to do it seems like just too much. The time to overcome the inertia is NOW! You can’t afford to wait any longer.
1. Find a company that suits your needs. A few months back, ING purchased Sharebuilder.com The company has been re-branded and fits well with its parent company. There are low-trade and low-commission fees. You can open a no-minimum account at Sharebuilder, as well. But other financial institutions have great offers, as well. Bank of America. eTrade. Merril Lynch. Etc, etc, etc. You do your research. You decide.
2. Figure out which IRA works best for you. Often times, when opening an account, you will be presented with easy-to-follow comparisons of which IRAs work best for you. It may be a traditional IRA. It may be a Roth-IRA. It may be another type. Try to suppress your feelings of being overwhelmed and make a decision. Overcome that intertia.
3. Figure out where you want your money invested. This is an important step. Often times, people open retirement accounts and don’t follow-through and decide where they want their money invested. The default option is often very low risk and very low return. So, as soon as your money is put into these accounts, study the different investment options and figure out where you want your money to go (and grow).
4. Remember, you’re in for the long haul. IRAs are not short-term investment accounts by any stretch of the imagination. Your balance will go up. Your balance will go down. I remember a couple of months back, checking my account on one of the worst days the market had in months. Big mistake. And one that I won’t make again!
5. Add to your account monthly. Make it a habit to add to your IRA. By not adding to your retirement, you are robbing yourself in the future.
It is important to overcome the inertia in order to make sure that you are accurately planning for your future financial needs.
