Types of IRAs
Traditional individual retirement accounts (IRAs) allow you to set aside money pre-tax that can grow in your account tax-free until the money is withdrawn, when it will be subject to your normal tax rate.
Roth IRAs share some characteristics with traditional nondeductible IRAs, but are different in some important ways. You can make after-tax contributions to a Roth IRA account up to the same annual limits as a traditional IRA.
If your spouse isn't earning income, he or she can open a separate spousal IRA to which you (the income-earning spouse) can contribute. The same contribution limits apply for these accounts as they do for traditional and Roth IRAs.
Rollover IRAs are funded with the assets from an employer-sponsored retirement plan, such as a 401(k) or 403(b).
If you have inherited an individual retirement account (IRA) from a spouse or loved one, you have several different options, depending on your circumstances.
If you're self-employed, are the sole employee of a small company, or if your corporation has 25 employees or fewer, a SEP IRA, or Simplified Employee Pension Plan, might be an attractive option.
SIMPLEs, or Savings Incentive Match Plans for Employees, are retirement plans that small business owners can open for their employees. Many plans do not have a designated financial institution, so employees may hold their SIMPLE individual retirement account (IRA) at the brokerage of their choice.
Need help choosing between a Roth and a traditional IRA? Check out this IRA comparison chart. It can help you understand some of the account features and