There are actually 11 different IRA options available to you. Due to this, it is very important to know the difference between the accounts and what might work best for your particular investment needs. Some might not be open to you, while you might find others just not necessary for how you are investing. Regardless, knowing what each IRA type is and what it does should make selecting the best IRA for you easier.
Individual Retirement Account
This is broken down into either a traditional IRA or a Roth IRA. You can set these up with your local bank or other financial account. You can contribute a variety of investment methods into the account, ranging from CDs to bonds and stocks.
Individual Retirement Annuity
Like the Retirement Account, this is broken down into a traditional and Roth account, although this form of IRA is set up with a life insurance company when you purchase a specific annuity contract through the company.
Employer and Employee Association Account
This is also known as a group IRA, although it basically is just a regular IRA account set up by an employer, employee association or a union. While set up by another organization, you still have the ability to add to the account, exactly as you with an individual account.
Simplified Employee Pension
SEP-IRA for short, this is another account set up by your employer. The employer is able to contribute up to $30,000 or 15 percent of your yearly compensation towards the IRA account.
Savings Incentive Match Plan for Employees IRA
SIMPLE-IRA for Short, this is a rather common form of retirement offerings by a business. The employer is able to contribute up to $10,000 per year to the IRA in a matching format. This means, as long as you contribute to your account, your company is going to match your investment all the way up to $10,000. This is an excellent way to grow your retirement account and only contribute half of it throughout the course of the year.
This is a traditional or Roth IRA that is set up by someone for their spouse who makes less than $2,000 annually in income. To file this sort of an account, the married couple must file jointly.
This is an IRA that is funded through a rollover from a different account. The retirement investment might come from a different IRA, 401k or other investment option.
There are very specific rules when it comes to an Inherited IRA, so it is important to look up more information on this type of account, but it generally is created for a beneficiary.
EIRA for short, this is an IRA set up for a college education or higher education program.
This is the IRA account you may use and is available to individuals under the age of 70.5 years of age.
The Roth IRA is similar to a traditional account, although you are not forced to take the money out at a set age.