6 Steps for Setting Up a Free IRA in Pennsylvania

Thinking about retirement? It’s never too early to start. An IRA is a personal retirement account you set up on your own, outside of work. It’s different from a 401(k) and can include investments like stocks, bonds, and mutual funds. Whether or not you have a 401(k), an IRA can help grow your savings - and may offer tax perks too. Here are six easy steps to get started with an IRA.

Step 1: Determine What Type of IRA You Want to Open.

There are two main types:

• Traditional IRA. Offers tax benefits and has strict rules regarding how much you can contribute based on your income.
• Roth IRA. Holds your tax-free investments until you can access them at age 59 ½.

• The right choice depends on your personal situation. It might be helpful to talk with a financial advisor to figure out what works best for you and your family.

Step 2: Check Your Eligibility

Before opening an IRA, make sure you meet the requirements. Both Traditional and Roth IRAs share features like contribution limits and deadlines, but they differ when it comes to income eligibility.

To open a Traditional IRA, you need earned income. For a Roth IRA, your Modified Adjusted Gross Income (MAGI) must fall within certain limits. For individuals, full contributions are allowed under $118,000, and partial contributions up to $133,000. For families, full contributions are allowed under $186,000, with partial contributions up to $196,000.

Step 3: Choose Where to Open Your IRA

Once you know what type of IRA you’d like to open, you’ll need to choose a financial institution - like a credit union, bank, or a brokerage firm. Your choice depends on how involved you want to be. If you prefer managing your own investments, look for platforms that offer that flexibility. If you'd rather leave it to the experts, consider options that provide professional support.

At PSECU, we make it easy. Whether you're just getting started or looking for guidance, we're here to help you open your IRA and feel confident about your future.
Contact us to get started - we’re happy to help!

Step 4: Ask Questions Before You Open Your IRA

It’s important to understand what you’re signing up for. Before choosing a financial institution, jot down a few questions to make sure the IRA fits your needs. Here are some good ones to ask:

• Can I automate my contributions?
• Is there a minimum monthly contribution requirement?
• Can I roll money over from an existing retirement account?
• What’s the maximum I can contribute each year?
• Are there any service fees?
• Do you offer online account management?
• Some answers, like contribution limits are set by the government and won’t vary. But each financial institution may have its own rules, features, and benefits, so it’s worth asking.

Step 5: Know Your Starting Investment

Although at PSECU you don’t need an initial investment, many financial institutions do require one. When you’re considering where you want to open your account, be sure you understand any minimum requirements for this initial investment.

Step 6: Choose Your Beneficiaries

It’s important to plan ahead. When you open an IRA, you’ll be asked to name a beneficiary, the person or people who would receive the funds if something happens to you.

Make sure to keep this information up to date, especially after major life events like marriage or the birth of a child. That way, your savings go exactly where you intend.

Set Up a Free IRA at PSECU Today

Ready to take the next step toward your financial future? Now that you know how to open an IRA in Pennsylvania, let us help you get started. We’ll walk you through the process, answer your questions, and make it easy to set up your account - so you can start enjoying potential tax benefits and peace of mind. Looking for more financial tips? Check out our resource center for helpful tips and resources.