Is it possible to Invest in individual stocks for a traditional IRA account?
Sunday, April 18th, 2010 at
11:15 pm
Up to this point I’ve invested in Vanguard index funds for my traditional IRA account, but this year I thought I might try picking out individual stocks to feed the traditional IRA account. Is this allowed? Also any advice about how I actually go about buying these individual stocks? Many thanks in advance for your help!!
Filed under: Contributions To Self Directed IRA
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Yes, you can invest in stocks (or ETFs or many other securities) using an IRA (unlike a 401k where this is not allowed).
You’ll just have to set up a IRA brokerage account. I have accounts at both Sharebuilder (super low stock trades) and Schwab (not as cheap but great customer service), for example, and they work well. Just be sure to choose a brokerage firm that won’t charge you a fee for keeping your IRA with them. Few do charge such fees now a days.
You could use Vanguard for your brokerage account, but I don’t reccommend it. I love Vanguard and they are a great mutual fund company. But their brokerage fees (the amount you pay to buy a stock) are on the high side. The only exception to this would be if you had a lot of money with Vanguard and would then be eligible for lower fees. Here’s a link: https://personal.vanguard.com/us/accounttypes/brokerage/ATSIntegrityValueContent.jsp
Here’s the link for Schwab’s fees: http://www.schwab.com/public/schwab/home/fees_commissions?cmsid=P
and Sharebuilder’s: https://www.sharebuilder.com/sharebuilder/fees/default.aspx
Yes. You can apply with Vanguard to use your IRA account as a brokerage account, which will allow you to buy and sell stocks. Call Vanguard and ask them for the correct form, or you can look for it online at their internet site. They will provide instructions on how to go about an actual purchase.