Individual Retirement Accounts (IRAs)
What is an IRA?
An IRA (individual retirement account) is an account that allows you to save for retirement with tax-free growth or on a tax-deferred basis. The most common types of IRAs are accounts that you open on your own; others can be opened by self-employed individuals and small business owners. BSNB offers several different types of IRAs including:
- Traditional IRAs – A Traditional IRA is established by an individual taxpayer. Contributions may be fully or partially deductible for the year the contribution is made, while withdrawals in retirement are taxed at ordinary income tax rates.
- Roth IRAs – A Roth IRA is established by an individual taxpayer. They provide no tax break for contributions, but earnings and withdrawals are generally tax-free.
- SEP (Simple Employee Pension) IRAs – A SEP IRA is established by a small business owner or self-employed individual. The employer can make contributions, however employees are not allowed to contribute to their accounts. Any withdrawals from their account during retirement are taxed as income.
- Simple IRAs – A SIMPLE IRA is established by a small business owner or self-employed individual. They allow employees to make contributions to their accounts, and the employer is required to make contributions. All contributions are tax deductible.
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