There are many types of IRA plans available to you, and it can be difficult to know which one is right for you. This quick guide will help you understand the different types of IRA plans so that you can make an informed decision about which one is best for your needs.
Traditional IRA
A traditional IRA is a retirement savings account that allows you to contribute pre-tax dollars. This means that your contributions will be deducted from your income before taxes are calculated. The benefit of this is that you will pay less in taxes overall. The money in a traditional IRA can be invested in a number of different ways, including stocks, bonds, and mutual funds.
Roth IRA
A Roth IRA is a retirement savings account that allows you to contribute after-tax dollars. This means that your contributions will be taxed at your current income tax rate. The benefit of this is that the money in your Roth IRA can be withdrawn tax-free in retirement.
SEP IRA
A SEP IRA is a retirement savings account that is available to self-employed individuals and small business owners. This type of IRA allows you to contribute up to 25% of your net earnings, up to a maximum contribution of $61,000. The money in a SEP IRA can be invested in a number of different ways, including stocks, bonds, and mutual funds.
SIMPLE IRA
A SIMPLE IRA is a retirement savings account that is available to small business owners and their employees. This type of IRA allows you to contribute up to $14,000 per year.
By investing in an IRA plan, you can ensure that you have a comfortable retirement. There are many different types of IRA plans available, so be sure to do your research to find the one that best suits your needs.
