By Andrew Freiburghouse | Money Rates Columnist

An individual retirement account, or IRA, can be a wonderful tool for saving for retirement. But including too many stocks in your IRA can increase your risk and heighten your stress. Adding an IRA money market account can help lessen that stress.

IRA money market accounts: a more stable choice

When you’ve been saving for years in hopes of enjoying a comfortable retirement, the fear of losing money can be especially acute. Watching your IRA account bounce up and down with the stock market as you near retirement age can be unbearable.

If that anxiety sounds familiar, you may want to think about investing in a money market account through your IRA itself. Doing so can help you and your money remain secure in chaotic times.

Money market account basics

Money market accounts are much like regular savings accounts. but traditionally pay higher interest and may require a higher minimum deposit to get started. The funds placed in an FDIC-insured money market account are protected up to a limit of $250,000 per deposit, per institution.

There are many ways to compare money market accounts online, such as through MoneyRates.com’s money market account page. In recent years, the best money market rates have been near or at historic lows. While that has been a disappointment to depositors, the strong stability of money market accounts still make them a viable choice for conservative investors.

IRA money market accounts: What’s the difference?

Some people may be scared away from starting an IRA because they think investing in an IRA automatically means being associated with the stock market. But in reality, you can put your IRA contributions into nearly any investment vehicle you want, including stocks, bonds or certificates of deposit (CDs) .

An IRA money market account can be a good option if you desire a higher interest rate than a regular savings accounts can provide, as well as the ability to move your money quickly, but don’t want to court excess risks.

The tax man cometh

The primary perk of an IRA is that no matter what investment products you choose within the account, you can gain substantial income tax benefits just for contributing. For example, if your tax rate is 35 percent between federal and state, you can save $350 in taxes for every $1,000 you contribute to your IRA.

Certain special rules apply to IRA investing, so consider checking with a tax professional before starting an IRA. You’ll also want to remember that your IRA may be subject to tax penalties if you withdraw the money before age 59 1/2. If you anticipate needing some of your savings sooner than that, it may be best to store some of it outside of your IRA in a conventional CD, savings account or money market account.