The five types of IRAs are traditional, Roth, Self-Directed, SEP, and simple. A traditional IRA is a retirement account that allows individuals to direct pre-tax income toward their retirement to grow tax-deferred. The account owner must pay income tax on withdrawals from the account. Roth IRAs are the opposite. These accounts have you pay taxes on money going into the account but have tax-free withdrawals. A self-directed IRA can hold various investments that aren't allowed for regular IRAs and is also managed directly by the account holder. A SEP IRA aids business owners with an easier way to contribute to their employees' retirement and their savings. Finally, a simple IRA allows you and your employees to put a percentage of pay aside for retirement. The account itself is similar to a traditional IRA because it is tax-deferred and is paid when it is withdrawn.
