Posted by Lending Club :: September 5, 2007 @ 10:54 am

A few days ago, I wrote about the different types of IRAs, and I recommended that everyone open up an IRA and try to fund it the best they can. How do you open up an IRA? Piece of cake. It's a 3-step process that doesn't take as much time as you think.

#1 - Choose a location for your IRA

First off, you need to choose a broker for your account. You can choose from any number of brokers. If you are setting up a new account, you might look for brokers offering low fees and an easy-to-use web site. Check out this cool page on The Motley Fool site, where you can compare a couple of brokers together.

#2 - Open the account!

Now you need to actually create an account. Regardless of which type of IRA you choose, all you have to do is enter in your bank account info to automatically transfer over money, or you can mail in a check.

#3 - Fund your account

Now that you have money transferred over, you need to invest it. Roth-IRAs have a max of $4,000 a year, so you should be trying to invest as close to $4k as you can. Other types of retirement accounts will have different limits, so you should check your account rules carefully. Next, you just need to search for a ticker symbol or browse by index and mutual funds, choose one you like, and buy it. For beginners, I definitely recommend basic index funds---they are simple, easy, and very profitable.

That's all there is to it! Like I said, piece of cake.