This popular retirement savings vehicle comes in several varieties

Many Americans know about Roth IRAs and Traditional IRAs — but there are other types of IRAs. Here’s a quick look:

Traditional IRA
(also known as a Deductible IRA) is an individual savings plan for anyone who receives taxable compensation. IRA assets may be invested in any number of vehicles, and contributions may be tax-deductible. Earnings in a traditional IRA grow tax-deferred until withdrawal, but will be taxed when withdrawal begins – and withdrawals must begin by the time the IRA owner reaches age 70½.
Roth IRA
offers you tax-free compounding, tax-free withdrawals if you are older than age 59½ and have owned your account for at least five years, and the potential to make contributions to your IRA after age 70½ without having to take RMDs (“Required Minimum Distributions”).
Simple IRA
is a qualified retirement plan for businesses with 100 or fewer employees.
is an acronym for “Simplified Employee Pension”. These Traditional IRAs are set up by an employer for employees and funded by employer contributions only.
Spousal IRA
is actually a rule that lets a working spouse make Traditional IRA or Roth IRA contributions on behalf of a non-working or retired spouse.
Inherited IRA

is a Traditional IRA or Roth IRA inherited by a non-spousal beneficiary.
Group IRA
is simply a Traditional IRA offered by employers, unions, and other employee associations to their employees, administered through a retirement trust.
Rollover IRA
Assets distributed from a qualified retirement plan may be rolled over into a Traditional IRA, which may be converted later to a Roth IRA.
Education IRA
Coverdell ESA
provides a vehicle to help middle-class investors save for a child’s education.

Consult a qualified financial advisor regarding your IRA options. There are many choices available, and it is vital that you understand how your choice could affect your financial situation. No one IRA is the “right” IRA for everyone, so do your homework and seek advice before you proceed.

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