How to choose a company for an IRA?
"I use TIAA-Cref for my 403(b) and Fidelity for my solo 401(k) and IRAs.  I have previously used Vanguard and have also used other discount brokers for my IRA. All of these companies will charge you nothing for an IRA, so there's really no point in comparing cost in that respect.  They are all the ""cheapest"" in this respect. Each one will allow you to purchase their mutual funds and those of their partners for free.  They will charge you some kind of fee to invest in mutual funds of their competitors (like $35 or something).  So the real question is this: which of these institutions offers the best mutual and index funds.  While they are not the worst out there, you will find that TIAA-Cref are dominated by both Vanguard and Fidelity.  The latter two offer far more and larger funds and their funds will always have lower expense ratios than their TIAA-Cref equivalent.  If I could take my money out of TIAA-Cref and put it in Fidelity, I'd do so right now. BTW, you may or may not want to buy individual stocks or ETFs in your account.  Vanguard will let you trade their ETFs for free, and they have lots.  For other ETFs and stocks you will pay $7 or so (depends on your account size).  Fidelity will give you free trades in the many iShares ETFs and charge you $5 for other trades.  TIAA-Cref will not give you any free ETFs and will charge you $8 per trade. Each of these will give you investment advice for free, but that's about what it's worth as well.  The quality of the advice will depend on who picks up the phone, not which institution you use.  I would not make a decision based on this." The fees for Vanguard and Fidelity IRA housing cannot be lower, because they are zero.  Depending on the fund you invest in, one or the other will have pretty low fees and are often the lowest in the industry. I don't qualify for TIAA-CREF, but my mother does and she loves them.  She can call up and get some advice for free.  I would not qualify it as the best advice in the world, but it certainly isn't horrible.   So it really depends on what you are looking for.  If you want a little investment advice, I would go with TIAA-CREF.  If you are a do it yourself-er go with Vanguard. I assume that with both companies you can buy stock mutual funds, bonds mutual funds, ETFs and money market accounts. They should both offer all of these as IRAs, Roth IRAs, and non-retirement accounts.  You  need to make sure they offer the types of investments you want. Most 401K or 403b plans only offer a handful of options, but for non-company sponsored plans you want to have many more choices. To look at the costs see how much they charge you when you buy or sell shares. Also look at the annual expenses for those funds. Each company website should show you all the fees for each fund. Take a few funds that you are likely to invest in, and have a match in the other fund family, and compare. The benefit of the retirement accounts is that if you make a less than perfect choice now, it is easy to move the money within the family of funds or even to another family of funds later. The roll over or transfer doesn't involve taxes.
Here is a nice overview from Vanguard on some options for a small business owner to offer retirement accounts.   https://investor.vanguard.com/what-we-offer/small-business/compare-plans I would look over the chart and decide which avenue is best for you and then call around to investment companies (Vanguard, Fidelity, etc. etc.) asking for pricing information. Instead of saying which one is better, which is too subjective, I think it is more important to understand what these institutions are.  They are kind of different animals. Edward Jones pretty much a full service wealth manager.  They meet with you in person, advise you on what retirement and savings accounts to get, they talk to you to evaluate your risk preferences.  They will talk to you about planning for your kids' college and about your insurance situation. They will probably attend your kids' bar mitzvahs and stuff too.  Of course, this isn't free.  With Edward Jones you will pay a fixed percentage of your managed wealth to them every year.  And they will likely put your money in expensive mutual funds.  And those mutual funds will charge a special 12b-1 fee, which is a kickback to the wealth manager.  Plan on giving 2% or so of your total wealth to the manager per year, plus whatever the mutual funds charge.   I don't have experience with Betterment, but they appear to be a robo advisor.  Robo advisors attempt to do the same kinds of things as wealth managers, but rely on computer algorithms and web pages to give you advice whenever possible.  This makes some sense because most people aren't actually that special in terms of their financial situation.  I don't know their cost structure, but presumably it will be significantly cheaper than Edward Jones.  They will almost certainly put you in cheaper funds (index funds and ETF's).  Think of it as a cost-conscious alternative to Edward Jones. Vanguard is a discount broker and a mutual fund family.  Their funds are among the biggest and cheapest in the world.  Fees on many of these funds will be a fraction of the equivalent funds Edward Jones will put you in.  They will charge you nothing at all to manage your money.  They will give you some assistance and advice if you call them but don't expect any house calls.  They aren't particularly in the business of giving advice.  If you know what you want to invest in, this is the cheapest way to do it by far.  Basically you won't have to pay anything at all except the actual cost of the assets you are investing in. Which is the best?  Depends on your own preferences and ability.  If you do not want to learn about personal finance and don't particularly care about whether you are getting the best return--if you don't mind paying for a personal touch--Edward Jones might be a good choice.  For most people who are comfortable asking this type of question online and interested in learning about finance even a little bit, I'd expect that Betterment or Vanguard will be a better choice.  For people who are willing to learn a bit of finance and manage their own affairs, using Vanguard (or a close competitor, like Fidelity) will ultimately result in the most wealth generated (the least given away to the financial industry). Your Simple IRA account is yours and yours alone, not your employer's. The only thing your employer can do with it is putting more money into it. The best option is to simple let it sit for the two years, and then either: Immediately move your Roth IRA out of Edward Jones and into a discount broker like Scottrade, Ameritrade, Fidelity, Vanguard, Schwab, or E-Trade.  Edward Jones will be charging you a large fraction of your money (probably at least 1% explicitly and maybe another 1% in hidden-ish fees like the 12b-1).  Don't give away several percent of your savings every year when you can have an account for free.  Places like Edward Jones are appropriate only for people who are unwilling to learn about personal finance and happy to pay dearly as a result.  Move your money by contacting the new broker, then requesting that they get your money out of Edward Jones.  They will be happy to do so the right way.  Don't try and get the money out yourself. Continue to contribute to your Roth as long as your tax bracket is low.  Saving on taxes is a critically important part of being financially wise.  You can spend your contributions (not gains) out of your Roth for any reason without penalty if you want/need to.  When your tax bracket is higher, look at traditional IRA's instead to minimize your current tax burden.  For more accessible ways of saving, open a regular (non-tax-advantaged) brokerage account. Invest in diversified and low-cost funds.  Look at the expense ratios and minimize your portfolio's total expense.  Higher fee funds generally do not earn the money they take from you. Avoid all funds that have a nonzero 12b-1 fee. Generally speaking your best bet is buying index funds from Fidelity, Vanguard, Schwab, or their close competitors.  Or buying cheap ETF's.   Any discount brokerage will allow you to do this in both your Roth and regular accounts.  Remember, the reason you buy funds is to get instant diversification, not because you are willing to gamble that your mutual funds will outperform the market.  Head to the bogleheads forum for more specific advice about 3 fund portfolios and similar suggested investment strategies like the lazy portfolios.  The folks in the forums there like to give specific advice that's not appropriate here. If you use a non-tax-advantaged account for investing, buy and sell in a tax-smart way.  At the end of the year, sell your poor performing stocks or funds and use the loss as a tax write-off.  Then rebalance back to a good portfolio.  Or if your tax bracket is very low, sell the winners and lock in the gains at low tax rates.  Try to hold things more than a year so you are taxed at the long-term capital gains rate, rather than the short-term. Only when you have several million dollars, then look at making individual investments, rather than funds.  In a non-tax-advantaged account owning the assets directly will help you write off losses against your taxes.  But either way, it takes several million dollars to make the transactions costs of maintaining a portfolio lower than the fees a cheap mutual/index fund will charge. Yes, I have done this and did not feel a change in cash flow - but I didn't do it a the age of 23.  I did it at a time when it was comfortable to do so.  I should have done it sooner and I strongly encourage you to do so.   Another consideration:  Is your companies program a good one?  if it is not among the best at providing good funds with low fees then you should consider only putting 6% into your employer account to get the match.  Above that dollar amount start your own ROTH IRA at the brokerage of your choice and invest the rest there.  The fee difference can be considerable amounting to theoretically much higher returns over a long time period. If you choose to do the max , You would not want to max out before the end of the year.  Calculate your deferral very carefully to make sure you at least put in 6% deferral on every paycheck to the end of the year.  Otherwise you may miss out on your company match.  It is wise to consider a ROTH but it is extremely tough to know if it will be good for you or not.  It all depends on what kind of taxes (payroll, VAT, etc) you pay now and what you will pay in the future.  On the other hand the potential for tax-free capital accumulation is very nice so it seems you should trend toward Roth. You could certainly look at the holdings of index funds and choose index funds that meet your qualifications.  Funds allow you to see their holdings, and in most cases you can tell from the description whether certain companies would qualify for their fund or not based on that description - particularly if you have a small set of companies that would be problems. You could also pick a fund category that is industry-specific. I invest in part in a Healthcare-focused fund, for example.  Pick a few industries that are relatively diverse from each other in terms of topics, but are still specific in terms of industry - a healthcare fund, a commodities fund, an REIT fund.  Then you could be confident that they weren't investing in defense contractors or big banks or whatever you object to. However, if you don't feel like you know enough to filter on your own, and want the diversity from non-industry-specific funds, your best option is likely a 'socially screened' fund like VFTSX is likely your best option; given there are many similar funds in that area, you might simply pick the one that is most similar to you in philosophy. Overall I think your idea is sound. The key here is to  choose that 401k provider wisely and have a specific asset allocation plan (like Joe mentioned) Summary of this approach: Pluses:  Minuses: I'd consider Vanguard for simple, no frills investing. If you're looking to get into choosing stocks, check out the Motley Fool. "I am failing to see why would a person get an IRA, instead of just putting the same amount of money into a mutual fund (like Vanguard) or something like that. Well, this isn't a meaningful distinction. The mutual fund may or may not be in an IRA. Similarly, the mutual fund may or may not be in a 401(k), however. So I'm going to treat your question as if it's ""why would a person get a mutual fund (like Vanguard) or something like that in an IRA, instead of just putting the same amount of money into the same mutual fund in a 401(k)."" Same mutual fund, same amount of money, narrowing your question to the difference between the two types of accounts, as stated in your question's title. Others have answered that to the extent that you really have no choice other than ""pick which type of account to use for a given bundle of money"", other than nobody having mentioned the employer match. Even if there were no other difference at all in tax treatment, it's pretty typical that 401(k) contributions will be matched by free money from the employer. No IRA can compete with that. But, that's not the only choice either: Many of us contribute to both the 401(k) and the IRA. Why? Because we can. I'm not suggesting that just-anybody can, but, if you max out the employer matching in the 401(k), or if you max out the tax-advantaged contribution limit in the 401(k), and you still have more money that you want to save in a tax-advantaged retirement account this year, you can do so. The IRA is available, it's not ""instead-of"" the 401(k)." Whether an investment is pre-tax is determined by the type of account (i.e., tax-advantaged vs ordinary taxable account), but whether you can invest in individual stocks is determined by the provider (i.e., the particular bank where you have the account).  These are orthogonal choices.  If you want to invest in individual stocks, you need to look for a bank that offers an IRA/401k/other tax-advantaged account and allows you to invest in individual stocks with it.  For example, this page suggests that Fidelity would let you do that.  Obviously you should look into various providers yourself to find one that offers the mix of features you want. There are two methods of doing this Pulling out the money and paying the penalty if any, and going on your way. Having the Roth IRA own the business, and being an employee. If you go with the second choice, you should read more about it on this question. I would definitely recommend contributing to an IRA. You don't know for sure you'll get hired full-time and be eligible for the 401(k) with match, so you should save for retirement on your own. I would recommend Roth over Traditional IRA in your situation, because let's say you do get hired full-time. Since the company offers a retirement plan, your 2015 Traditional IRA contribution would no longer be deductible at your income level (assuming you're single), and non-deductible Traditional IRAs aren't a very good deal (see here and here). If there's a decent chance you would get hired, this factor would override the pre-tax versus post-tax debate for me. At your income level you could go either way on that anyway. A Solo 401(k) would be worth looking into if you wanted to increase your contribution limit beyond what IRAs offer, but given that it sounds like you're just starting out saving for retirement, and you may be eligible for a 401(k) soon, it's probably overkill at this point. A 401-K is something you get through an employer. I recommend getting a self-directed IRA.  You can open an IRA with Scottrade with $500 The money you put into an IRA is tax deferred, meaning that you do not have to pay taxes on profits. It may also lower your tax liability.  Scottrade has a feature to automatically reinvest any dividends from the securities you own. This feature allows you to avoid commissions on those automatic purchases.  Don't try to time the market. Pick a good ETF (exchange traded fund) that pays dividends. It will give you diversification.  Avoid the urge to buy and sell constantly. This only gives commissions to the broker. I like that you are hedging ONLY the Roth IRA - more than likely you will not touch that until retirement.  Looking at fees, I noticed Vanguard Target retirement funds are .17% - 0.19% expense ratios, versus 0.04 - 0.14% for their Small/Mid/Large cap stocks. First, check out some of the answers on this question: Oversimplify it for me: the correct order of investing When you have determined that you are ready to invest for retirement, there are two things you need to consider: the investment and the account.  These are separate items. The investment is what makes your money grow. The type of account provides tax advantages (and restrictions).  Generally, these can be considered separately; for the most part, you can do any type of investment in any account. Briefly, here is an overview of some of the main options: In your situation, the Roth IRA is what I would recommend. This grows tax free, and if you need the funds for some reason, you can get out what you put in without penalty. You can invest up to $5500 in your Roth IRA each year. In addition to the above reasons, which are true for anybody, a Roth IRA would be especially beneficial for you for three reasons: For someone that is closer in age to retirement and in a higher tax bracket now, a Roth IRA is less attractive than it is for you. Inside your Roth IRA, there are lots of choices. You can invest in stocks, bonds, mutual funds (which are simply collections of stocks and bonds), bank accounts, precious metals, and many other things. Discussing all of these investments in one answer is too broad, but my recommendation is this: If you are investing for retirement, you should be investing in the stock market. However, picking individual stocks is too risky; you need to be diversified in a lot of stocks. Stock mutual funds are a great way to invest in the stock market.  There are lots of different types of stock mutual funds with different strategies and expenses associated with them. Managed funds actively buy and sell different stocks inside them, but have high expenses to pay the managers. Index funds buy and hold a list of stocks, and have very low expenses. The conventional wisdom is that, in general, index funds perform better than managed funds when you take the expenses into account.  I hope this overview and these recommendations were helpful. If you have any specific questions about any of these types of accounts or investments, feel free to ask another question. First:  great job on getting it together.  This is good for your family in any respect I can think of.  This is a life long process and skill, but it will pay off for you and yours if you work on it. Your problem is that you don't seem to know where you money goes.  You can't decide how whacky your expenses are until you know what they are.  Looking at just your committed expenses and ignore the other stuff might be the problem here.  You state that you feel you live modestly, but you need to be able to measure it completely to decide. I would suggest an online tool like mint.com (if you can get it in your country) because it will go back for 90 days and get transactions for you.  If you primarily work in cash, this isn't helpful, but based on your credit card debt I am hoping not.  (Although, a cash lifestyle would be good if you tend to overspend.) Take the time and sort your transactions into categories.  Don't setup a budget, just sort them out.  I like to limit the number of categories for clarity sake, especially to start. Don't get too crazy, and don't get too detailed at first.  If you buy a magazine at the grocery store, just call it groceries. Once you know what you spend, then you can setup a budget for the categories.  If somethings are important, create new categories.  If one category is a problem, then break it down and find the specific issue. The key is that you budget not be more than you earn but also representative of what you spend. Follow up with mint every other day or every weekend so the categorization is a quick and easy process.  Put it on your iPhone and do it at every lunch break.  Share the information with your spouse and talk about it often.