Many people who have individual retirement accounts (IRAs) are surprised by the fees that go along with saving for retirement. You are not necessarily stuck paying them, however. To eliminate, or at least lower, the fees you are charged, you may choose a self-directed IRA, shop around for brokerages that do not charge fees, ask your broker to eliminate your fees, or negotiate to lower them. You may even reduce the fees you pay by consolidating separate IRA accounts into one account. While you may not totally avoid fees by doing so, combining accounts may allow you to pay substantially less.
When you receive advice from an IRA custodian and have him handle your transactions, you can typically expect to pay more IRA fees. As such, one way to avoid IRA fees involves opting for a self-directed account. With this type of IRA, you are responsible for doing your own investment research, and you may have to handle the transactions as well. In exchange for this, you may find that your fees are much lower.
You may also avoid IRA fees by researching brokerages that offer no-fee accounts. You may find such brokerages by searching online or browsing listings in a local phone directory. You may also call around to different firms and ask whether they offer no-fee accounts. Additionally, you may ask friends and family members for recommendations. Some of the people closest to you may hold no-fee accounts and point you in the right direction.
In some cases, you may be able to avoid IRA fees by talking to your broker about your desire for a no-fee account. He may be willing to eliminate your fees, especially if he knows you are willing to switch to a different firm in order to get a better deal. If he is unable to eliminate your fees because of the firm's policies, he may instead reduce the commission on some of your trades. This will not directly eliminate your IRA fees, but may help to offset them.
Sometimes IRA consolidation is a good option for lowering IRA fees. If you have more than one IRA, you may opt to combine them and pay fees on just one account. This which may translate into significant savings.
While you may be firm in your desire to avoid IRA fees, it is important to avoid making financial decisions based on fees alone. Many financial experts recommend comparing accounts and brokerages before you make a decision. This way, you may have a better chance of choosing the brokerage and account that best fit your financial goals.