What is the difference between a ROTH, SEP and Traditional IRA?

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October 2016
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A Roth IRA is one that is funded with after-tax money. Upon reaching retirement age, the contributions and growth are distributed free of any income tax. A SEP IRA is for a self-employed person and it is funded with pre-tax money. Upon retirement, all funds distributed are treated as taxable income. A Traditional IRA is funded with pre-tax money, many times by a worker with W-2 income. Upon retirement, all funds distributed are treated as taxable income. The contribution limits vary over time so be sure to contact your CPA or tax-preparation professional for your particular situation.

October 2008