Search Log in Menu Individuals Invest & Retire Individual retirement account Individual retirement account You’ve probably heard a lot about IRAs, and how they’re an investment option for retirement. But what exactly is an IRA—and is it the right choice for you? IRA basics An Individual Retirement Account (IRA) is a type of investment vehicle that helps you save for retirement while providing tax-advantaged status for your retirement savings. There are two types of IRAs: Traditional and Roth In a Traditional IRA, you deduct your IRA contributions from your taxes in the year you made the contributions, which lowers your taxable income for that year. You then pay taxes on the money when you withdraw it in retirement (based on your income at the time of withdrawal). In a Roth IRA, you contribute using after-tax money (taxed based on your income at the time of contribution). You can withdraw your contributions without taxes or penalties at any time. If you have earnings, you can withdraw them tax-free in retirement.1 You can set up an IRA in one of two ways: A rollover IRA. Transfer over existing retirement savings (like a 401(k) account from a past job) to fund your IRA. A start-up IRA. Make an initial, lump-sum deposit to fund your IRA. Why choose an IRA for your retirement savings? An IRA is all about you. It offers: Convenience. Your IRA belongs to you. It’s not tied to a company you work for, and it sticks with you through retirement, so you have more flexibility with when and how you contribute to it. Control. You’ll have access to a broad range of investment options, not just what’s offered in an employer retirement plan. (Options can include mutual funds, stocks, bonds, and more—and we can help you with investment choices if you want.) Consolidation. You can transfer other retirement accounts into your IRA—consolidating your savings in one spot. Learn more about your retirement savings options (PDF) Why choose Principal for your IRA? You've seen why an IRA can be a great option for saving for retirement. Learn more about our IRA options. Or, open your IRA with Principal today: We offer options specific to your investing style. A Principal IRA keeps you in the driver’s seat. It gives you the control—with as much or as little assistance as you want to help you make informed investment decisions. A Principal® SimpleInvest IRA uses technology to create an investment mix personalized to you, that’s monitored and rebalanced on an ongoing basis. Let us connect you with a financial professional in your area to discuss a rollover IRA. Want more info first? Check out our article on things to think about when opening an IRA. Get started Rollover to an IRA Call 800-247-8000, ext. 2251, to talk through your options. Already have an IRA with Principal? Log in to view account information online or add to your account. 1 Your account must be open for 5 years and you must be over age 59 ½ to be eligible for qualified tax-free withdrawals of earnings. This document is intended to be educational in nature and is not intended to be taken as a recommendation. Investment and insurance products are: Not insured by the Federal Deposit Insurance Corporation (FDIC) or any federal government agency. Not a deposit, obligation of, or guaranteed by any Bank or Banking affiliate. May lose value, including possible loss of the principal amount invested. The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements. Financial professionals are sales representatives for the members of Principal Financial Group®. They do not represent, offer, or compare products and services of other financial services organizations. Insurance products and plan administrative services provided through Principal Life Insurance Co. Securities offered through Principal Securities, Inc., 800-547-7754, member SIPC. Principal Life and Principal Securities are members of Principal Financial Group®, Des Moines, IA 50392. Principal® SimpleInvest is a discretionary investment advisory program that offers diversified investment portfolios for a fee. Principal® SimpleInvest is sponsored and managed by Principal Advised Services, LLC, which consults with Principal Global Investors, LLC in the creation of the portfolios and the selection of the underlying portfolio investments. Principal Global Investors, LLC also provides trading and execution services. Principal Advised Services, LLC and Principal Global Investors, LLC are members of the Principal Financial Group®. Brokerage and custodial services provided by Apex Clearing Corporation, member FINRA, NYSE and SIPC. Apex Clearing Corporation is not affiliated with any member of the Principal Financial Group®. Principal® SimpleInvest portfolios are comprised primarily of Principal® products, including affiliated mutual funds and ETFs. Please refer to the Form ADV (PDF) and Form CRS (PDF) for Principal Advised Services, LLC, the Miscellaneous Fee Schedule (PDF) for Apex Clearing Corporation, and other applicable disclosures and agreements for important information about Principal® SimpleInvest and its services, fees and related conflicts of interest. All investments have inherent risks. Investing in Principal® SimpleInvest portfolios does not guarantee profit or protect against loss. 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