Dallas Dutch Girl

Below are the top three major types of IRAs (Individual Retirement Accounts) available in the U.S., along with a short description of each:

1. Traditional IRA

• Tax Benefits: Contributions may be tax-deductible; taxes are paid on withdrawals.
• Contribution Limits (2025): $7,000/year; $8,000 if age 50+.
• Required Minimum Distributions (RMDs): Begin at age 73.
• Eligibility: Anyone with earned income can contribute, but deductibility depends on income and participation in a workplace plan.

2. Roth IRA

• Tax Benefits: Contributions are not deductible; withdrawals are tax-free in retirement.
• Contribution Limits (2025): $7,000/year; $8,000 if age 50+.
• No RMDs during the account holder’s life.
• Income Limits (2025): Phases out for single filers at ~$146,000–$161,000; married couples at ~$230,000–$240,000.

3. Rollover IRA

• Purpose: Holds assets rolled over from a previous employer’s retirement plan (like a 401(k)).
• Tax Benefits: Maintains tax-deferred status; no taxes owed at rollover.
• Type: Usually becomes a Traditional IRA but can be Roth if rolling over a Roth 401(k).

Other IRA’s

• Inherited IRA (Beneficiary IRA) created when you inherit an IRA or 401(k) from someone else.
• Spousal IRA (can be Traditional or Roth) for non-working spouse.
• Self-Directed IRA (can be Traditional or Roth) requires custodian and careful compliance.
• Backdoor Roth IRA (Strategy, not a type) for high earners.
• SEP IRA for self employed individuals. | SIMPLE IRA for small business.