| Traditional | A tax-deferred retirement account that allows your dividends, interest payments, and capital gains to compound without being hindered by taxes. | Taxes are paid only when you make withdrawals in retirement. | $7,000 annually for people under 50. Full amount can be contributed each year, but it may be fully or only partially deductible based on your income. | $1,000 additional for people 50 and older for a total of $8,000 annually. |
| Roth | Contributions are made with money you have already paid taxes on. | Because taxes have already been paid, withdrawals are tax-free. | $7,000 annually for people under 50. May be limited based on filing status and income. | $1,000 additional for people 50 and older for a total of $8,000 annually. |
| Rollover | A Traditional or Roth IRA for money that is transferred from an employer-sponsored plan, like a 401(k) or 403(b). | Taxes are paid only when you make withdrawals in retirement (excluding Roth IRAs). | N/A* | N/A |
| SEP (Simplified Employee Pension) | A Traditional IRA for self-employed individuals or small business owners with one or more employees. Tax-deductible contributions are made by the employer, not the employee. | Taxes are paid only when you make withdrawals in retirement. | Employers can contribute up to the lesser of 25% of compensation o $70,000. Self-employed individuals must use a special calculation to determine their contribution. | N/A |
| SIMPLE (Savings Incentive Match Plan for Employees) | For businesses with 100 employees
or fewer, this IRA allows employees
and employers to make tax-deductible contributions. Employers can choose to match employee contributions or contribute a fixed percentage of the employee's wages. | Taxes are paid only when you make withdrawals in retirement. | $16,500 annually. | $3,500 additional for people 50 and older for a total of $20,000 annually. |