Traditional IRA

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Traditional IRA (Individual Retirement Account) is an account that people add money to over time and purchase investments that are held in the account. With the time that money grows based on how the market performs and provides the retirement income to the individual.

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Contributing to the IRA account can reduce the annual tax amount. In this account, the money grows tax deferred, meaning that tax will be applied on the withdrawals. There is a limit to contribute into the IRA. Since this is a retirement plan, there is a penalty on early withdrawal before the age 59½.

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Roth IRA

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Difference between a traditional IRA and Roth IRA is that the contributions in Roth IRA are post tax dollars and the withdrawals and not taxed. However, penalty on withdrawing before the age of 59½ still applies to the Roth IRA.

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Anyone can contribute to a Traditional IRA, However, for the Roth IRA, only those below a certain threshold are allowed to contribute.

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SEP IRA

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A SEP IRA (Simplified Employee Pension) is a type of traditional IRA for self-employed individuals or small business owners. If you are a business owner with either one or more employees, or work as a free-lance, you can contribute to SEP IRA. It acts as a Traditional IRA as the contributions made are tax deferred and will be taxed upon withdrawals.

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The limit for contribution is much higher than a traditional IRA.

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Please call us to find out more details on any of the products or book your free Financial Needs Analysis session with one of our experienced agents who will help you understand your needs and will also help you to get more information so that you can make a better decision with you 401(k) rollover.