Saturday, December 21, 2019

Before we get to the more popular Roth IRA and traditional I

Before we get to the more popular Roth IRA and traditional IRA, let’s briefly look at two of the less commonly discussed IRAs—the SEP IRA and the SIMPLE IRA:

SEP IRA — Also known as the Simplified Employee Pension Individual Retirement Account, this IRA allows an employer to contribute to your Traditional IRA. So instead of your employer adding money into a pension fund, it goes into your IRA as if you were investing it yourself.

SIMPLE IRA — This stands for Savings Incentive Match Plan for Employees, and it’s set up very similarly to a 401(k) plan, meaning the employer matches the contributions made by the employee.

Again, the SEP IRA and SIMPLE IRA are not too common, because the business has to set it up, whereas an individual sets up their own Roth or traditional IRA.

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Traditional IRAs allow anyone younger than

Income restrictions:  70.5 years old to contribute regardless of income. In order to contribute to a Roth IRA, a single filer must make les...