• Self Directed IRAs
  • Types of IRAs
  • Investment Options
  • Funding Options
  • Converting to a Roth IRA
  • Distributions
  • Prohibited Transactions
• Health Savings Accounts
  • About HSAs
  • Qualified Medical Expenses
  • Features of HSA Manager
  • Investment Options
  • Funding Options
  • HSA Guidelines
• Solo 401(k)s
  • Eligible Businesses
  • Investment Options
  • Funding Options
  • Roth Solo 401(k)

Types of IRAs 

Personal IRAs

A personal IRA lets you set aside money and invest it for the future. Depending on the type of IRA you select, you may be able to take advantage of immediate tax benefits or tax-free withdrawals in retirement.
 

Traditional IRA 

As the first type of IRA created for individuals, the Traditional IRA allows annual tax-deductible contributions that depend on the individual's Modified Adjusted Gross Income and the individual's participation in an employer's retirement plan. Withdrawals are taxed; however, earnings on principal and interest accumulate tax-deferred until funds are withdrawn from the account penalty-free after age 59-1/2. Minimum required distributions are mandatory after age 70-1/2.
 

Among other considerations, a Traditional IRA may be appropriate for individuals who anticipate that tax rates during retirement will be lower than their current rate, or whose tax strategy is to defer taxes until after retirement. 
 

Roth IRA 

This is an alternative to a Traditional IRA with distinct tax benefits. Contributions, for example, are not tax-deductible, but can be made past age 70-1/2. Earnings from a Roth IRA accumulate tax-free; but unlike a Traditional IRA, withdrawals are free of tax and penalties, provided certain conditions are met. Those conditions include a five-year holding period and attainment of age 59-1/2, or if made for certain specific purposes.  

Employer Sponsored IRAs 

Millennium Trust offers two types of employer sponsored IRAs: the SEP IRA, and the SIMPLE IRA. Small-business owners should consider their IRA choices carefully to determine which makes the most sense for their business and employees. 
 

SEP IRA - Simplified Employee Pension

The SEP IRA allows employers to make contributions to their employees' retirement accounts of up to 25 percent of the employee's compensation, or $49,000, whichever is less. A SEP IRA is funded 100% by the employer; employees do not contribute. 
 

SIMPLE IRA - Savings Incentive Match Plan for Employees

The SIMPLE IRA enables employers with fewer than 100 employees to establish an individual retirement account for each participating employee. The SIMPLE IRA has requirements similar to a Traditional IRA; however, individual contribution limits are higher. The employer can match all or a part of the employee's contribution.