A type of individual retirement account in which contributions may be tax-deductible, and investment earnings grow tax-deferred until withdrawal during retirement. Withdrawals from a Traditional IRA are taxed as ordinary income, and there are penalties for early withdrawals before age 59 1/2, with some exceptions.
A type of individual retirement account in which contributions are made with after-tax dollars, and investment earnings grow tax-free. Qualified withdrawals from a Roth IRA during retirement are also tax-free, and there are no required minimum distributions during the account holder's lifetime.
A Savings Incentive Match Plan for Employees (SIMPLE) is an IRA Ideal for small businesses. Both the employer and employee can contribute to the employee's account. The contributions are pre-tax and grow tax-deferred until withdrawal. There are contribution limits and penalties for early withdrawals.
Simplified Employee Pension (SEP) IRAs, are retirement savings plans for self-employed individuals or small business owners and their employees. Contributions are made by the employer and are tax-deductible, and investment earnings grow tax-deferred until withdrawal during retirement.
These are for self-employed individuals or business owners with no employees. The plans allows for high contribution limits and tax-deferred savings potential. They do require administrative docs and may have fees.