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Retirement Intermediate: Special Types of Individual Retirement Accounts

Introduction to Special Types of Individual Retirement Accounts SIMPLE Retirement Accounts (SIMPLE IRAs) Eligibility Requirements for SIMPLE IRAs Simplified Employee Pension Plans (SEP IRAs) Summary of Special Types of Individual Retirement Accounts
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Introduction to Special Types of Individual Retirement Accounts

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Discover two rarer types of individual retirement accounts beyond the traditional and the Roth: SIMPLE IRAs and SEP-IRAs.

What you will learn

  • SIMPLE Retirement Accounts (SIMPLE IRAs)
  • Eligibility Requirements for SIMPLE IRAs
  • Simplified Employee Pension Plans (SEP IRAs)

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Introduction to Special Types of Individual Retirement Accounts

The individual retirement account (IRA) was created to encourage persons to save money for their future retirement years. As an incentive to use these accounts, Congress approved income tax savings. Because of their popularity, Congress extended the law to include other accounts under the same tax codes to encourage small businesses to establish employer-sponsored retirement plans. These plans include SIMPLE and SEP IRAs.

Because they fall under the same section of the tax code as individual retirement accounts, they have similar rules to follow regarding contributions, withdrawals, tax benefits, and penalties.