Protecting your Family’s Future with IRA’s


Most people have heard of or even have some sort of IRA. But, did you know that there are several different kinds of IRA’s to choose from? The IRS has categorized IRA’s in order to offer a variety of options to meet each individual’s personal needs. Some of the basic IRA investment opportunities for your family are listed below.

Traditional IRA

The traditional IRA or individual retirement account is an investment account that allows the contributor to specify what investments they want their money to be placed into. These investments are done pre-tax, and there are no income taxes on dividend income, or a capital gain penalty until the money is withdrawn. The contributor may contribute 100% of their earnings up to a maximum dollar amount that is specified by the IRS. This is a way to make your money work for you without having to immediately pay taxes on the returns.

Roth IRA

A Roth IRA account is very similar to the traditional IRA account with a few differences. The most distinctive difference is when you pay tax on the money being invested. Roth IRA contributions are not tax deductible like traditional IRA accounts are, so the money invested is after tax money. This means that when you retire and begin to withdraw money the money you withdraw will be after tax, versus with a traditional IRA where you will be taxed on the money that you withdraw.

Additionally, Roth IRA’s do have specific income eligibility requirements that traditional accounts don’t. They can also be maintained indefinitely since there is no minimum distribution requirement.


This type of IRA is an employer established retirement plan that links directly to a traditional IRA. The SEP is a good option for those who are self-employed or have employees to establish a retirement savings plan for their staff and themselves. Contributions to a SEP established account are done as pre-tax payroll deductions and deposited into the retirement account which is linked to the individual account holder’s (employee or business owner) traditional IRA.

There are distribution, investment, and contribution rules linked to an SEP account that should be reviewed before establishing just how much you want to invest at one time. These funds and their financial returns are taxed during retirement time when the funds are dispersed.

Simple IRA

Also known as the Savings Incentive Match Plan, the SIMPLE IRA is similar to the SEP in such that it is employer established and run. The main difference between a SEP IRA and a SIMPLE IRA is that with a SIMPLE IRA the employer also contributes to the investment on behalf of the employee or account holder. Basically, the employer matches up to a certain percentage of what the employee contributes.

In addition to the employer match SIMPLE IRA, there is the straight contribution SIMPLE IRA where the employer contributes a pre-established amount to the employees retirement fund whether the employee contributes or not.

IRA’s are a great way to start building your retirement savings, and with so many types to choose from there is one to fit any family’s needs. So, check with your local bank or human resource department to see what you qualify for today and start saving towards a comfortable and happy retirement.