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

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April 2017
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A SEP is an excellent retirement saving plan for self-employed individuals and small companies that allows your business to contribute and deduct up to 25% of your (and qualifying employees) salary to an IRA account. The maximum contribution to a SEP IRA for 2017 is $54,000. Contributions are tax deductible, grow tax deferred, and are finally taxed as withdrawn from the account.

A traditional IRA and a Roth IRA are retirement saving accounts that allow individuals to save $5,500 per year, or $6,500 per year over age 50. Contributions to a traditional IRA are tax deductible subject to income limitations. Please consult with your tax preparer for specifics. A Roth IRA is not tax deductible, but grows tax free, and withdrawals in retirement are tax free. A Roth IRA is an excellent saving choice for individuals that have a long time until retirement. Eligibility to contribute to a Roth IRA is also subject to income limitations. Please consult your tax advisor for details.

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