What's an IRA?
An IRA is a personal, tax-deferred account the IRS created to give investors an easy way to save for retirement. Because this account is tax-deferred, any earnings you make grow tax-free. Roth, traditional, and spousal are 3 common types of IRAs, which you can read more about below.
Why open an IRA?
Types of IRAs we offer
Roth IRA
- You won't be able to deduct your Roth IRA contribution.
- You won't pay taxes on withdrawals of your earnings as long as you take them after you've reached age 59½ and you've met the 5-year-holding-period requirement.
- Income limitations apply.
- If your spouse is earning low or no annual wages, they may be able to open a spousal IRA to save tax-efficiently for retirement.
Traditional IRA
- You may be able to deduct some or all of your traditional IRA contributions.
- You'll pay ordinary income tax on withdrawals of earnings and on any contributions you originally deducted on your taxes.
- No income limitations.
- If your spouse is earning low or no annual wages, they may be able to open a spousal IRA to save tax-efficiently for retirement.
How your retirement savings could grow
While the annual IRA contribution limit of $7,000 may not seem like much, you can stack up significant savings.
Pay less and keep more. The average Vanguard mutual fund expense ratio is
82% lower
than the industry average.2
At age 50, you qualify for a $1,000 IRA catch-up contribution—jumping your annual limit to $8,000—potentially increasing the power of compounding, which could mean greater savings for you over time.
Helpful resources
Investing on your own?
Check out key information you can use as you begin your successful DIY investing journey.
Looking for professional advice?
We offer expert help at the low cost we're known for.
Have a nonretirement savings goal?
We have a variety of accounts to select from. See which best fits your savings needs.
Pick investments for your IRA
401(k) vs. IRA? Use both if you can.
Getting to a complete retirement plan
Frequently asked questions
There's no charge to open a Vanguard IRA. The fund or product you choose may have a minimum investment amount.
Minimum investments for Vanguard mutual funds can range from $3,000 to $50,000. Non-Vanguard fund minimums are subject to the respective fund companies' rules.
Vanguard ETFs® can be purchased for as little as $1. Non-Vanguard ETFs and products—like stocks, bonds, etc.—must be purchased at market price.
Traditional IRA contributions could help reduce your taxable income. Your deduction amount can vary depending on your modified adjusted gross income and whether you're covered by a retirement plan at work.
An IRA itself isn't an investment. It's a basket that holds your selected products—mutual funds, ETFs, stocks, bonds, etc. Your retirement portfolio's earnings depend on the investments you choose, how they perform in the market, and the interest they pay.
You can invest in mutual funds, ETFs, stocks, bonds, and more. You can even select mutual funds created specifically for retirement. Target Retirement Funds, for example, are broadly diversified mutual funds that come with a preset, professionally managed investment mix—so you can get a complete portfolio with just one fund.
Learn how to choose IRA investments
Explore Target Retirement Funds
If you have a retirement account, like a 401(k) or 403(b), with a former employer, consider rolling over that money into an employer-sponsored plan held at Vanguard or a Vanguard IRA. Keeping track of your portfolio can be easier when all your assets are consolidated in one place.
Yes. You can get the advice you need by using our robo-advisor or working with a financial advisor for ongoing portfolio guidance and access to exclusive tools.