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CostHelper > Personal Finance  > Taxes & Financial Planning > IRA

IRA Cost


How Much Does an IRA Cost?

 
low costLow: No Feesaverage costMedium: $20-$50 a yearhigh costHigh: $200+ a year
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Called an Individual Retirement Arrangement, an Individual Retirement Account or an Individual Retirement Annuity, an IRA is a special government-defined and regulated account with tax advantages to help save for retirement.

Typical costs:

  • IRAs are legally allowed to charge annual maintenance fees; many are $30-$50, others are as low as $20 or as high as $200 or more. The annual fee may be waived or larger accounts, and some IRAs are set up with no annual maintenance fees.
  • Each time you buy or sell stocks, mutual funds or other investments in your IRA account, there can be either a commission charge or a transaction fee, which runs $7-$15 for discount brokers or $20-$100 or more at other institutions.
  • The government imposes a 10 percent penalty for withdrawing IRA funds before age 59-1/2 unless the owner is permanently disabled or dead, or the money has been in the IRA for at least five years and is used to pay for non-reimbursed medical expenses, a first-time home purchase, higher education, to pay back taxes to the IRS, or to cover medical insurance premiums for the unemployed.
Related articles: Financial Planner, Stock Broker, Mutual Fund, Credit Card

What should be included:
  • IRAs are set up through a bank, savings and loan, credit union, mutual fund or brokerage. The money can be invested in mutual funds, stocks, bonds, CDs and annuities. Some IRAs require a minimum amount to open an account; others have no minimum.
  • A traditional IRA allows you to save money without paying taxes until you take it out of the account while with a Roth Ira lets you pay the income tax now and withdraw the money tax-free during retirement. Both types of IRAs have eligibility requirements and other restrictions; AARP.org[1] gives a side-by-side comparison.
  • The Ohio State University Extension gives a detailed overview of how IRAs work, with definitions of common terms.
  • The IRS lists instructions for setting up a Simple IRA as a retirement plan for the employees of a small business.
Additional costs:
  • Some IRAs have a set-up fee of $25-$150 or more, and a termination fee of $50-75. They might charge $25-$75 an hour for doing research, or $2-$3 a page for making copies. Read the fine print, and ask specific questions.
Shopping for an ira:
  • Review the fee schedule before setting up an IRA account.
  • The Motley Fool[2] provides a comparison chart of the products and fees offered by TD Ameritrade[3] , ShareBuilder and E*Trade Financial[4] .
  • Other leading IRA brokers are Charles Schwab[5] and Fidelity[6] .
  • Check the IRA terms at your current bank, credit union or savings and loan. Consider and compare a number of different sources for your IRA.
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What People Are Paying - Recent Comments
Edward Jones is not much better
Amount: $700.00
Posted by: Fed up with fees in Lake Havasu, AZ.Posted: March 2nd, 2017 08:03AM
Company: Edward JonesType of Fees: monthly fees
My husband and I both have IRA through Edward Jones. I have had these accounts for about 8 years now with a yearly fee of 40.00. I get a call from my advisor that now we will have to pay 25.00 a month. That's quite a jump. In fact my accounts don't make that much. I will now bite the bullet and close all my accounts. There is no way I am paying that much.
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Traditional IRA
Amount: $10,000.00
Posted by: A concerned sister. in Avon by the Sea, NJ.Posted: December 12th, 2016 12:12PM
Company: Morgan StanleyType of Fees: IRA & Penalty fees
My sister is 82 years old, disabled and living on social security and a very small pension. Because her IRA was less than $25,000 she paid a quarterly penalty of $50.00 and an annual fee of $50.00. She is not stupid but was unaware of the amount of fees she was paying. Since 2010 she paid $1,000.00 in fees on a $10,000 IRA!!!. No one ever called her to give her any guidance. When I recently called why the minimum distribution she selected was not deposited in her account, which was in response to a request for such from Morgan Stanley, I was basically told she shouldn't have got the letter, that she was paying the $250 fees and shouldn't be in the account she was in. Why didn't anyone ever call her? They like to bury you with paper that the average older person cannot read. I spoke with another client adviser and he said the accounts are self directed??? My question is why the fee? I recommend that any senior with any type of account with Morgan Stanley to TRANSFER it.
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Avoid Mutual of Omaha and Amerifunds
Amount: $5,000.00
Posted by: a user in Bethlehem, PA.Posted: December 15th, 2015 09:12AM
Company: amerifundsType of Fees: sales fee
I was charged 5% sales fee to open a roth IRA! I was told that this was a one time fee and I would not be charged again when adding funds to the account. Well guess what? I was charged when I went to add funds and now the story changes!!!!
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to high of yearly fees
Amount: $3,500.00
Posted by: V. Stump in Hilo, HI.Posted: October 28th, 2015 11:10AM
Company: AmeripriseType of Fees: to maintain 4x yr. meetings
we pay $3,500 yearly for 4x a yr. get together, for SPS Ameriprise IRA.
I'm thinking this is too much fees.
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Extremely HIGH FEES SmithBarneyMorganStanley
Amount: $1,918.77
Posted by: Queenie in St Paul, MN.Posted: December 8th, 2014 11:12AM
Company: SB-MorganStanleyType of Fees: Advisory Fees
Old account with Traditional IRA, current value about $160,000, no real change in value for 10 years. In 2012 they had Annual Account Fee $150. In 2013 they added an Advisory Fee...totaling $1,918.77. I am quite literally OUTRAGED. This is not fair to the very elderly person for whom this is their only money. If they had actually **made** some Real Money for this person, justifying these extreme fees, I would be fine. But as it is, they are robbing my elderly relative.
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Fees
Amount: $75.00
Posted by: DS in Minneapolis, MN.Posted: January 23rd, 2013 11:01PM
Company: TCF BankType of Fees: Maintenance & Exit
My Fidelity IRA charges no fees. My lastest employer liquidated, and somehow my 401(k) plan got transferred into an IRA with a different company, TCF Bank. Since then, I have paid a $25 per year mainenance fee while generating interest that amounts to only a few dollars per year, and when I finally transferred it out to my bank account, I later received a final statement indicating they had charged a $50 Exit fee. I'm guessing TCF pays employers healthy sums of money to buy the retirement accounts of employees with the specific intent of harvesting fees from unwitting employees. Do not pay a company to have your money. Competent companies pay you to have your money.
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high fees high commision smith barney
Amount: $300.00
Posted by: danmcg in nyc, NY.Posted: March 14th, 2012 12:03PM
Company: smith barneyType of Fees: commision
regular market cash buys for stock, they charge about %10 commission when you purchase, im guessing another 10% when you sell. I don't see how this could be worth it for anyone, unless they have better rates for rich people.
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MORGAN STANLEY SMITH BARNEY CHARGES YOU EVEN WHEN THEY DON\\\'T HAVE YOUR MONEY ANY LONGER
Amount: $75.00
Posted by: AngryKim in Boston, MA.Posted: September 30th, 2011 10:09AM
Company: MORGAN STANLEY SMITH BARNEYType of Fees: CUSTODIAL FEES
I am transferring my long standing Smith Barney accounts to another brokerage firm largely due the fact that I find my new broker to be imperious and non-responsive. (I got stuck with this one when my broker of 10+ years quit being a broker). While they have paperwork of the transfer in hand, they still charged me the $75 annual custodial fee! And when I asked new broker why I am being charged for a year they will not have my money, I got a booklet. So I decided the best way to use that loss of $75 is to make others aware of this shell game.
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Outrageous IRA Fees
Amount: $70,000.00
Posted by: SusanRachel in Montgomery, AL.Posted: December 30th, 2010 01:12AM
Company: Smith BarneyType of Fees: IRA
I just moved my IRA accounts and was hit with 2 custodial fees of $75/account even though I paid the same fees 6 months ago and $95/account in termination fees. I am outraged! Is there really nothing that can be done about this?! Stay away for mith Barney for the sake of your (at least mine was) small (and growing smaller with every fee charged) account.
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Smith Barney--Pigs--Avoid
Amount: $50,000.00
Posted by: Avoid Smith Barney in , NA.Posted: August 15th, 2010 09:08AM
Company: Smith BarneyType of Fees: Everything they can Think Of
Had a non-performing IRA (they did nothing) with SB for years. Finally took the time to find a new home for my retirement funds (large to me minuscule to SB)with Vanguard and asked my broker to simply list all exit fees. I'm stunned and angry, here they are

FROM Smith Barney
<For a direct check to you the following fees will apply:
1.) $75 custodial fee for 2010
2.) $75 termination fee
3.) Fees will apply to selling the two securities that you own. $100 minimum.
For a transfer to another securities firm:
1.) $75 custodial fee for 2010
2.) $75 termination fee
3.) $95 ACAT fee
Sorry about this. I wish I had more control>.
I have asked for the authority/notification to me for hitting me with these exorbitant charges. Are they required to notify IRA customers about Fees when transferring funds out of SB?Where in what they send a client are these fees indicated or described in any way and must a brokerage place do that at least?
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IRA Fees
Amount: $0.00
Posted by: Gentile in New York, NY.Posted: July 24th, 2010 12:07PM
Company: Apple BankType of Fees: $35 yearly
At the yearly rate charge for an IRA, you'd be better off putting the money in a sock. The nerve of Susy Orman and the rest of these crooks telling poor people to invest in an IRA, you will lose money by the time you withdraw
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IRA Termination
Amount: $95.00
Posted by: Ren in Charlotte, NC.Posted: May 27th, 2010 01:05PM
Company: Smith BarneyType of Fees: Termination
They slapped on a $95 2010 TERMINATION FEE on top of a $50 CUSTODIAL FEE. I searched the web and found this page and adding to the complaints against SB.
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IRA termination fee
Amount: $20,000.00
Posted by: Jim Y in Hood River, OR.Posted: March 16th, 2010 11:03AM
Company: US BankType of Fees: IRA termination fee
I just rolled over a large IRA cd because US Bank was only offering 0.3%. They charged me $25 plus six months interest plus 1% of the principal balance. Don't they realize I am unlikely to business with them in the future?
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Fees
Amount: $8,000.00
Posted by: a user in Sioux Falls, SD.Posted: March 7th, 2010 07:03PM
Company: Smith BarneyType of Fees: Termination/Custodial
Avoid Smith Barney IRA's. They decided the small investore was not worth there time. They raised there fees (annual 75) and then when you moved the account off they charge more fees. Termination Fee and Custodial Fee. Whats worse yet the Custodial Fee is charged annually but they charged it on me again even thou I just paid it 8 months ago. These guys do not deserve to be in business and should be shut down by the SEC. DO NOT DEAL WITH THEM.
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Avoid Smith Barney
Amount: $30,000.00
Posted by: Investor Tom in Dayton, OH.Posted: May 7th, 2009 05:05PM
Company: Citi Smith BarneyType of Fees: Yearly, Termination
Avoid Smith Barney IRA's. Their fees just went up to $75 per year, plus when I closed my account, they charged the $75 fee plus another $75 for "Termination Fee". These guys are really pirates.
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External Resources:
  1.  www.aarp.org/money/
  2.  www.fool.com/retirement/ira/index.aspx
  3.  /www.tdameritrade.com/retirement-planning.page
  4.  /us.etrade.com/home
  5.  www.schwab.com/public/schwab/investing/accounts_products/accounts/ira
  6.  /www.fidelity.com/investment-guidance/overview
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