Individual retirement accounts better known as the IRAs aid in compensating your income after retirement just like the individual retirement plans. These accounts offer tax benefits while working and financial security post retirement. These are nothing but various forms of individual retirement arrangements made during your tenure at your workplace. Moreover, as a taxpayer, if you purchase these retirement arrangements from any certified insurance company then the tax to be paid is waived off. Instead, those installments are deposited in your retirement accounts, which then come handy once you retire.
There are multiple options of individual retirement accounts available in the market today like the traditional individual retirement account, Roth individual retirement account, SEP individual retirement account, SIMPLE individual retirement account, and Rollover individual retirement account to name a few. In the traditional IRA, the deposits are either tax-deductible or non-tax deductible depending upon the kind of deposit made. In the Roth IRA, the deposit or contributions have no tax implications. SEP IRAs are a good option if you are self-employed as they allow you to title the pension account on your own name instead of the company name. Saving Incentive Match Plan for Employees or SIMPLE IRAs have lower limits of deposits to be made and hence is less complicated than the other IRAs. The remaining types of individual retirement accounts are considered obsolete by a few according to the present day tax laws, however, quite a few individuals opt for these kinds of accounts so that they can watch over the asset sources conveniently. You may also opt for certain IRAs that allow you to nominate your spouse with your assets post retirement.
All of the above individual retirement accounts are designed as per the Employee Retirement Income Security Act of 1974 that mandates definite guidelines regarding the individual retirement plans to be undertaken by the individuals as per their requirements.