What's an IRA?

An individual retirement account, or IRA, is a personal retirement savings account. Even if you've signed up for an employer-sponsored plan like a 401(k), 403(b) or TSP, you can still open an IRA to boost your savings and add flexibility to your budget. Investments you can make inside an IRA include:

  • Stocks and options
  • Mutual funds and exchange-traded funds, or ETFs
  • Bonds and CDs
  • Fractional shares through Schwab Stock Slices™
  • Target date retirement funds

Common types of IRAs

While Schwab offers several types of IRAs, here are three of the most common types:

  • Traditional

    Uses pretax money that's taxed on withdrawal in retirement

  • Roth

    Uses after-tax money, so withdrawals in retirement are tax-free

  • Rollover

    Lets you move an employer-sponsored retirement plan and keep its tax advantage

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Differences between a Roth IRA and a traditional IRA

Roth IRA
Roth IRA
Contributions

After-tax refunds

Tax deductible?

No

Withdrawals Tax-free?

Yes, if you met withdrawal requirements.

Required minimum distributions

None for the original account owner.

Traditional IRA
Traditional IRA
Contributions

May be tax deductible.

Tax deductible?

No

Withdrawals Tax-free?

No. Taxes are paid on the entire balance.

Required minimum distributions

Start at age 72, Not required for those who were 70½ before 2020.

Differences between a Roth IRA and a traditional IRA
Roth IRA Traditional IRA
Contributions After-tax funds. May be tax deductible.
Tax deductible? No Yes, subject to income limits and participation in employer-sponsored retirement plans.
Withdrawals Tax-free? Yes, if you met withdrawal requirements. No. Taxes are paid on the entire balance.
Required minimum distributions None for the original account owner. Yes, read our article about required minimum distribution (RMD) changes to learn more.

Schwab can help you reach your retirement goals.

USAA and Schwab believe saving for retirement is one of the most important goals. They have tools, education and assistance to help keep you on the right path, so you can retire on your terms.

  • $0 Minimum Deposit

    Open an account with no minimums and pay $0 for online listed equity trades.See note1

  • 24/7 Professional Guidance

    Get financial advice and access to convenient support from over 300 branches across the nation.

  • Online Tools and Resources

    Get access to planning resources, a complimentary financial plan and more help to manage your future.

  • Satisfaction GuaranteedSee note2

    If for any reason you're not completely satisfied, Schwab will refund any eligible fees or commission and work with you to make things right.

Get on track with a complimentary financial plan.

Saving for retirement is one of the most important goals you can have. That's why Schwab offers a complimentary digital financial plan with every account. Find out what it'll take to retire the way you want.

See your accounts in one place.

You can view your Schwab accounts alongside your USAA accounts — all without leaving usaa.com or our mobile app. Check your general information and balance with us or go straight to schwab.com with no additional logon required to manage your account.

IRA and rollovers FAQ

Discover more investing resources

You can invest confidently when you brush up on investing basics and get familiar with your options.

See investing education and resources  (opens new window)

Related advice articles

Looking for more peace of mind in retirement? Consider an annuity.

An annuity can help protect you from the risk of outliving your money. It's an insurance product that guards your savings from market fluctuations and supplements your Social Security or pension benefits.See note3

Important Information from USAA Investment Services Company (ISCO):
Review our relationship with you in our Relationship Summary PDF.


Important information from Schwab:
Investors should consider carefully information contained in the prospectus, or if available, the summary prospectus, including investment objectives, risks, charges and expenses. You can request a prospectus by calling 800-435-4000. Please read the prospectus carefully before investing.

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