Traditional IRA:
- Best for:Those just starting out.
- These accounts offer the ability for tax deductible contributions and tax deferred growth.
Roth IRA:
- Best for:Those just starting out.
- Contributions are made with after-tax dollars and money comes out in retirement tax-free.
SEP IRA:
- Best for: Self-employed people or small-business owners with no or few employees.
- Contributions to a SEP IRA are tax deducatble.
- Contributions can only bemade by the employer, no employee contributions are allowed.
- Because of this contribution limits are smaller than they are with Solo 401(K)s.
Individual 401(k):
- Best for: A business owner or self-employed person with no employees (except a spouse usually) that are looking for higher cont. limits then the SEP IRA.
- Tax deductible contributions can be made by both the employer and the employee.
SIMPLE IRA:
- Best for: Larger businesses, with up to 100 employees.
- These have smaller limits compared to the Solo and SEP plans.
Defined Benefit Plans:
- Best for: A self-employed person with no employees who has a high income and wants to save a lot for retirement on an ongoing basis.
At Brighter Days Planning we are currently using a SEP IRA for our retirement plan.
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