In order to determine which type of IRA is best for you, you must consider many factors such as, what will you be using the money for, when will you need the money, what type of potential tax deductibility is offered, etc.
Here are the general benefits of three types of IRAs:
- Traditional - This type of IRA offers potential tax deductibility. There are no income limits for contributions. The funds you contribute to this type of IRA are considered pre-tax dollars and you will be taxed upon withdrawal of the funds.
- Roth - This type of IRA offers potentially tax-free earnings. The funds you contribute to this type of IRA are considered after-tax dollars and you may get tax-free withdrawals.
- Coverdell Education - This type of IRA offers the potential of tax-free earnings when the funds are used for educational purposes.
For more details on an IRA account, please send a message on our Investment Services web page or by calling Member Solutions at 877-794-6712.