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Retirement planning is one of the primary financial goals of our lifetimes. To help prepare for this important goal, you can save and invest your money in a retirement plan. These plans let you take advantage of numerous tax benefits and provide an opportunity to grow your funds over time. While you may have an employer-sponsored retirement plan such as a 401(k), other types of retirement accounts like a Traditional individual retirement account (IRA) or Roth IRA can help supplement these savings.
Many online brokerage companies offer retirement plans that you can use to power your retirement savings. Deciding which provider is right for you depends on your financial situation, the type of account you’d like to use, your desire for financial guidance, and the overall fees, to name a few factors. With this in mind, we’ll look at some of the top retirement plan options so you can take more control of your financial future.
Best Overall : Fidelity Investments
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Fidelity wins our best overall retirement plan for brokerage companies thanks to a strong selection of IRA options, low costs, and variety of investment choices. You’ll find that no matter your income and financial background, Fidelity offers an IRA that aligns to your situation.
Many retirement account types to choose from
Strong variety of investment choices and account management features
User-friendly digital planning tools
Physical branch locations
Additional fees for certificates of deposit (CDs) and bond trades
No futures or forex trading
While the most commonplace IRAs like Traditional and Roth are available, small business owners can take advantage of accounts that have additional tax benefits such as a SIMPLE IRA, SEP IRA, or solo-401(k) plan. Costs are kept low due to no annual IRA fees, no account minimums, and low or fee-free mutual fund expense ratios.
You’ll also have access to a wide range of investment and planning tools that help keep your retirement journey on track if you decide to manage the account yourself. Additionally, Fidelity’s robo-advisor service, Fidelity Go, is available for free with under $10,000 deposited and an extra fee once more than $10,000 is invested. More extensive planning and human advice is offered through the Personalized Planning & Advice tier for a 0.50% annual management fee.
Best for the Self-Employed : Charles Schwab
Be aware that Schwab does require a minimum balance of $25,000 and charges a one-time planning fee of $300 and a monthly advisory fee of $30 to combine personalized investment guidance with robo-advisory investing, through its Intelligent Portfolios Premium offering, for example.
Charles Schwab is among the largest players in the investment space and winner of our best for self-employed category. There is a wide variety of retirement account options to choose from to go along with the plethora of investment options. Schwab’s acquisition of broker TD Ameritrade in 2020 has further bolstered its offering and position as a leader in the industry.
Strong selection of IRA options
Wide range of portfolio management solutions
Extensive research, education, and screening tools
Commission-free trading for stocks and ETFs
External account syncing
High fees for active options and margin traders
Lack of extensive crypto trading features,
High minimum balances for robo-advisor and advisor tiers
No forex trading
Schwab stands out to self-employed individuals in particular due to the number of appealing retirement plan accounts, including individual 401(k) plans, SEP IRAs, SIMPLE IRAs, and Personal Defined Benefit Plans. These plans have no requirements for minimum balances, so you can start saving regardless of your financial situation. You’ll also find that Schwab has portfolio management solutions for investors of all backgrounds.
Self-directed users can enjoy no commission trades for stocks and ETFs paired with extensive research capabilities to help with investment decisions. Retirement savers who prefer a robo-advisor solution can use the Intelligent Portfolios with a $5,000 minimum and no advisory fee or the Premium version with $25,000 minimum and a one-time setup fee of $300 and $30 a month thereafter for unlimited, ongoing guidance. If you are looking at larger investment minimums, you can get additional hands-on service by visiting a branch in-person.
Best for Low Cost : Vanguard
Vanguard is one of the largest and most recognized investment companies around. Vanguard is known for its focus on low fees and passive investing through index funds. This powerful combo can help retirement savers reach their long-term goals while spending less time worrying about their portfolio and less money in investment fees. As a result, Vanguard is our choice for the best low cost broker for retirement plans.
Excellent selection of low-cost or no-cost mutual funds and ETFs
Advice and portfolio management tiers for a variety of investors
Strong education content
Minimum investment of at least $1,000
Limited features and capabilities for active investors
High minimum investment requirements for digital advice and advisor offerings
With Vanguard, you’ll have access to an extensive catalog of low-cost or no-cost index mutual funds and ETFs with some limited active funds available as well. Since the platform is geared towards a long-term, passive investment philosophy, there aren’t a lot of features that cater to active traders. However, building a diversified portfolio of index funds with Vanguard is easy to do on your own.
You’ll need at least $1,000 to open a self-directed Vanguard retirement account. The Digital Advisor platform features light robo-advisor guidance for a minimum investment of $3,000 and an annual fee between 0.15% to 0.20%. A human financial planner is included through the Personal Advisor Service for a $50,000 minimum deposit and a 0.30% annual fee. Regardless of which platform you choose, you’ll keep more money in your pocket and invested towards retirement.
Best Robo-Advisor : Betterment
Betterment was one of the first robo-advisors to hit the market offering automated portfolio solutions and digital advice. With access to human advisors, cash management options, and crypto investing, Betterment gives you a complete platform to manage your retirement money and wins our best robo-advisor for retirement plans category.
Low fees and no minimum deposit for automated investment management
Digital planning tools and financial calculators
Access to human financial planners
Cash management and crypto investing options
External account syncing
Automated portfolio management only
Premium tier requires a $100,000 deposit
Betterment helps you automate your investment strategy by assessing your goals, risk tolerance, and financial situation so that a portfolio can be assigned that best aligns to your situation. You can also leverage comprehensive retirement planning tools on your dashboard to ensure you’re on track and make adjustments if needed.
Betterment’s digital offering charges 0.25% of assets under management on an annual basis. Additional financial planning session packages with a human advisor are also available for purchase separately. You can access Betterment’s Premium tier once you have $100,000 invested, and then a Certified Financial Planner is included with the slightly higher 0.40% annual fee.
All of the brokers we covered in this review have strong platforms at excellent price points for people looking to open a retirement account. A large part of your retirement readiness depends on leveraging a retirement plan that best fits your situation. In addition to choosing an account that suits your needs, you’ll need to ensure that your retirement plan brokerage platform aligns with your investment preferences and investment strategy as well.
Fees are also a key criteria when evaluating retirement plan providers. That said, fees are not the be-all and end-all, when choosing a retirement plan broker as you’ll also need to consider other factors like the value of the advice offered and the other retirement planning features. Once you’ve identified which of these components are most essential for your situation, you’ll be able to take more control over your retirement journey by choosing the broker that best fits your needs.
Compare the Best Retirement Plan Providers
|Company||Account Minimum||Fees||Account Types|
|Fidelity||None||None||Traditional, Roth, Small Business|
|Charles Schwab||None||None||Traditional, Roth, Small Business|
|Vanguard||$1,000||None||Traditional, Roth, Small Business|
|Betterment||None||0.25% of assets annually||Traditional, Roth, SEP IRAs|
Which of These Brokers is the Best?
Although Fidelity was our pick for best overall, our criteria is purposely general and may not match up with your personal needs. Ultimately who you are as an investor and where you are in your financial journey will play a bigger role in selection than any general criteria.
If you are looking to actively manage a portfolio, for example, only two of the brokerages we covered—Fidelity and Schwab—will be a fit. For passive investors, all four have solutions, with Schwab, Fidelity, and Vanguard offering both self-directed and robo-advisor run retirement plans, while Betterment is a robo-advisor that will also offer you a human financial advisor. Moreover, if you don’t have $1,000 or more to invest, then Betterment is the only option for an automated portfolio, although the other three do offer the education and the tools you need to set up a retirement portfolio yourself. Once you have a clear idea of what you want, you can expand your search in that specific space. While these are the best in their specific category, they are not the only ones that will match your particular retirement plan criteria.
What Are Different Types of Retirement Plans?
There are a number of different retirement plan options to choose from. While Traditional and Roth IRAs are among the most popular, there are other accounts more suitable for self-employed individuals such as a SEP IRA or solo 401(k). Each retirement plan comes with unique tax benefits so you can choose an account that best matches your situation to set you up for future retirement success.
How Should You Choose the Best Retirement Plan?
There isn’t really a best retirement plan or retirement account. What you are choosing is the best brokerage that offers the retirement accounts that fit your current needs. This means you are evaluating the brokerage like you would for a regular investment account using criteria like the account minimums, fees, and availability of the tools, support, and assets you want.
When evaluating a broker in terms of holding your retirement accounts, you’ll also want to see what specific retirement planning tools or advice is available to help power you towards your retirement destination. Your overall retirement plan may be made up of several retirement accounts and may well be a succession of different account types as your career evolves (401(k) to SEP IRA, for example).
All this said, the key to a good retirement plan isn’t choosing the best retirement account. The real secret is contributing to a retirement account regularly and evaluating your retirement accounts and retirement plan at least annually. The best retirement account you can access today will not always be the best, especially as your growing account balance opens up new possibilities.
How Do You Start Investing for Retirement?
One of the best strategies to invest for your retirement future is setting up automatic, ongoing contributions into a retirement plan. You can keep the investment strategy simple yet effective by investing in low-cost index funds. Once you have these factors in place, consider increasing your deposits as you’re able over time to set even more money aside for retirement.
How Much Should You Save for Retirement?
While each financial situation is unique, a good benchmark to strive towards is saving 15% of your gross monthly income for retirement. Starting this approach when you’re young adds up as your invested dollars can compound and grow over time. The longer you’re able to save at least this much each month, the more likely you’ll keep your retirement timeline on track.
We are dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on its platforms, costs and fees, security, the mobile experience, and customer service. We established a rating scale based on our criteria, collecting thousands of data points that we weighed into our star-scoring system.