Steps to Open a Retirement Account Online

For most people, retirement planning revolves around 401(k)s, which are accessible through your employer. Individual retirement accounts are one of the best yet underrated ways to secure your financial life after retirement.

The best part? Virtually anyone can open an IRA. This guide breaks down the key steps you need to take to open a retirement account online without any hassle:

Step 1: Choose Your Account Type

The first step to open an IRA account online is choosing the right account type. The most common types include:

Traditional IRA

Contributions to a traditional IRA are tax-deductible, which means you pay taxes upon withdrawal in retirement. For 2026, the traditional IRA contribution limit is $7,500 for individuals under age 50, and $8,600 for those aged 50 or older.

Roth IRA

A Roth IRA is funded with after-tax money. Simply put, your money grows tax-free, and you can enjoy tax-free withdrawals in retirement. The contribution limit for a Roth IRA is the same as that for a traditional retirement account.

Rollover IRA

It is an individual retirement account used to hold money moved from an employer-sponsored plan, such as a 401(k) or 403(b), into an IRA. You get to maintain the tax-deferred status of your retirement savings while avoiding early withdrawal penalties.

SEP IRA

If you’re self-employed or own a small business, you can open a Simplified Employee Pension (SEP) IRA. It usually has a higher contribution limit.

Consider the pros and cons of different retirement accounts, and choose the option that best fits your income and tax bracket. For instance, if you expect to be in a higher tax bracket in retirement, a Roth IRA is a great option. In comparison, if you are currently in a high tax bracket, a traditional IRA is a better option.

Step 2: Select a Brokerage

The next step is to choose a brokerage or retirement account provider. Reliable brokerages like SoFi offer the following features:

Diverse investment options
No account fees
No commission on stocks or ETFs
Contributions with no minimum amount required

One of the top features that sets SoFi apart is the 1% match on contributions and rollovers.

Step 3: Choose How to Manage Your Account

Once you’ve picked a provider, consider an account management style that fits your investment style and preferences. If you want to be hands-on and select your own investments in your IRA, self-directed investing is the option for you. You pay no commission on your trades.

But if you want a more hands-off approach to investing, automated IRAs or robo-advisors are the best option for you. They leverage algorithms to build and automatically rebalance your portfolio based on your risk tolerance and goals.