Like 401(k) plans, IRAs can come in a range of different flavors. Savers have different ways to prepare for their futures based on the levels of their income and their tax liability.
There are 3 different types of IRAs:
- Traditional IRA
- Roth IRA
- SEP IRA
Today we break down the three different types of IRAs:
The Traditional IRA
The traditional IRA is the plan you’re likely to be most familiar with. It works like a traditional 401(k) but with lower contribution limits, with deductions that can phase out as your income rises, and with a free choice of retirement funds.
