It’s become a cornerstone of prevailing wisdom; be sure to roll the money in your employer-sponsored retirement plan into an IRA when you separate from your employer. This smart move can help preserve tax benefits and avoid tax penalties, plus make it easier to keep track of your retirement assets. Perhaps this is why most IRA assets come from lump-sum rollovers rather than annual contributions.

But an IRA rollover is just the beginning. An IRA is not really an investment in itself, but rather a special type of account that can be invested in thousands of ways. When you roll money into an IRA, the custodian will typically put it into a default investment fund until you specify otherwise.

Considering that mutual funds manage the largest share of IRA assets, here’s a roundup of some mutual fund options:

Stock funds typically pursue investment gains by trading stocks issued by domestic and/or international companies.

by Daniel Beckett
An Individual Retirement Account, or IRA, is a retirement plan that provides tax advantages for retirement savings within United States tax law. Unlike 401k plans, which must be provided by an employer, IRAs can also be created by an individual. Aside from one specific type, IRAs contributions are made before tax.

Types of Individual Retirement Accounts

Different types of IRAs work in different ways. Traditional IRAs have no real distinguishing characteristics. Roth IRAs are perhaps the most different in intent, as the funds are taxed before contribution, allowing tax free withdrawals later in life.

SEP IRAs are generally offered by small businesses or self-employed indivuals. SIMPLE IRAs are more similar to 401(k) plans than other IRAs, though they have lower contribution limits and simplified administration. Self-Directed IRAs allow the holder to manage the fund themselves, rather than appointing a manager.

Though there were once …