Account types

Self-Directed Accounts for Individuals

$395 per year + $50 establishment fee

Funds contributed to your account are not taxed until withdrawn.

A Traditional individual retirement account (IRA) is one of the most common types of retirement savings accounts.

Contributions made into the account each year may provide a tax-deduction equivalent to the same amount contributed (subject to government guidelines and income limitations). In retirement, most individuals find themselves in a lower tax bracket than when they were employed. This means they pay a lower tax rate on funds withdrawn from their account than they would have during the years the funds were invested in the account.

Any earnings within a Traditional IRA account grow tax-deferred. Only when the funds are withdrawn from the account as a distribution will there be a potential tax liability.

Key features

  • Tax-deferred: One of the most notable benefits of a Traditional IRA is the fact that funds are tax-deferred while in the account. That means that any gains are also tax-deferred until withdrawn from the account.
  • Tax deductible: Contributions to a Traditional IRA may be tax deductible, provided you meet certain requirements.
  • Required distributions: Another important factor when considering Traditional IRAs is the required minimum distribution (RMD) requirement when you turn age 73.
  • Distribution penalties: Keep in mind that distributions from your IRA can be subject to a 10% early distribution penalty tax if taken before age 59 1/2, unless a penalty tax exception applies.
  • Catch-up contributions: For account owners age 50 and older, a “catch-up” provisions allows an additional contribution of $1,000.
  • First-time home buyer: Up to $10,000 can be withdrawn from a Traditional IRA penalty-free, if the money is used to acquire a principal residence for a first-time home buyer. The owner of the home must be the Traditional IRA’s owner, their spouse, or their lineal ancestors and descendants. The individual cannot have owned a home in the previous 24 months.

$395 per year + $50 establishment fee

Funds are taxed before they’re contributed to your account and are not taxed upon withdrawal.

A Roth individual retirement account (IRA) lets you save and invest after-tax dollars. Funds contributed to a Roth IRA have already been taxed. Any earnings grow tax-free if certain requirements are satisfied—and there are no additional taxes on regular contributions because you have already paid taxes on these funds.

In a Roth IRA, you can make investments to potentially increase the value of your account. Only a few investments are restricted by the Internal Revenue Service (IRS).

Roth IRA contributions must be made with earned income, and that income must fall within certain Modified Adjusted Gross Income (MAGI) limits. View the specific MAGI limits for Roth IRA accounts here.

Key features

  • Tax-free growth: Any earnings on contributions made to your account will grow tax-free. All regular contributions made to a Roth IRA can be withdrawn tax-free at any time, if certain requirements are satisfied, because your contributions have already been taxed.
  • No distribution requirements: A Roth IRA does not require you take distributions based on age, unlike other tax-deferred retirement plans such as a traditional IRA or a 401(k) plan.
  • Tax-free withdrawals: Roth IRA distributions, including the withdrawal of earnings, may be tax-free if certain requirements are met.
  • First-time home buyer: Up to $10,000 can be withdrawn from a Roth IRA, penalty free, if the money is used to acquire a principal residence for a first-time home buyer. The home buyer must be the Roth IRA’s owner, their spouse, or their lineal ancestors and descendants. The individual cannot have owned a home in the previous 24 months.

$395 per year + $50 establishment fee

Established once a beneficiary inherits a Traditional or Roth plan after the death of the original owner.

An inherited individual retirement account (IRA) is an account that is opened when a beneficiary inherits an IRA or employee-sponsored retirement plan, after the death of the original owner.

A person who inherits their spouse’s IRA has a unique option: they can make the account their own. They would not have to establish an “inherited IRA.” Instead, they could establish a traditional IRA or Roth IRA depending on the account type of the original owner.

As a beneficiary, you cannot make additional, annual contributions to an inherited IRA, but the assets in the account will remain tax-deferred or tax-fee in some cases. Generally, distributions from these types of accounts do not incur a tax penalty.

As with any other IRA, funds within the account can be invested to increase the value of the inherited IRA. The Internal Revenue Service (IRS) places a few limitations on the investments that can be made within an inherited IRA and include a very limited number of items.

Key features

  • Tax-deferred growth: Any gorwth in the account will contiue to be tax-deferred until the assets are withdrawn.
  • No early withdrawal penalties: You will not incur a 10 percent early withdrawal penalty on distributions, even if you are under age 59½.
  • Taxable earnings: For an inherited Roth IRA, the earnings are taxable only if they are distributed before the 5-year period has been met. The five-year period generally begins on January 1 of the year for which the deceased Roth IRA owner made his first Roth IRA contribution.
  • No additional contributions: Unable to make annual contributions to an Inherited IRA.
  • Transfer requirements: Assets from an inherited IRA can only be transferred to another inherited IRA, inherited from the same party.
  • Required distributions: Required minimum distributions (RMDs) are mandatory for inherited IRAs.

Self-Directed Accounts for Businesses

$445 per year + $150 establishment fee

A Simplified Employee Pension (SEP) plan allows employers to contribute to IRAs set up for employees.

Any size business can adopt a SEP plan. Employers may allow SEP plan contributions to be made on a pretax or Roth basis.

A Simplified Employee Pension Plan, or SEP IRA, is a type of employer-sponsored retirement savings plan that allows employers and their employees to increase the amount they can save for retirement.

The SEP IRA may be a great option if you are a self-employed individual or small business owner because it allows you to take a potential tax deduction equivalent to the contributions made into the SEP IRA each year. This tax deduction is subject to government guidelines.

The rules governing a SEP plan are not as complicated as a 401(k) plan and the plan types have a few similar benefits. Contributions to a SEP IRA are tax deductible, and earnings within the account are tax-deferred until withdrawn, just like a 401(k) plan. This means that any earnings in these accounts grow without having to be included in your annual taxable income. Only when the funds are withdrawn from the account as a distribution will taxes potentially apply.

Key features

  • Tax-deferred: Funds are tax-deferred while in the account, which means that you do not have to pay taxes until the funds or assets are withdrawn from the account.
  • Tax deductions: Contributions to a SEP IRA may be tax deductible by a business, provided the employer meets certain requirements.
  • Tax-free component: You may choose to allow Roth contributions in your SEP plan. If certain requirements are met, the accrued earnings may be taken tax-and penalty-free. 
  • Employee retention: A SEP plan may encourage employee retention by providing the team with an additional benefit to assist them in saving more for retirement.
  • Longer contribution period: Employees can continue to receive SEP contributions past age 73, as long as they meet the requirements of the employer’s SEP plan agreement.

$445 per year + $150 establishment fee

A Savings Incentive Match Plan for Employees (SIMPLE) plan allows both employees and employers to contribute to SIMPLE IRAs set up for employees.

Businesses must have no more than 100 employees. Employers may allow SIMPLE IRA contributions to be made on a pretax or Roth basis.

A Savings Incentive Match Plan for Employees, commonly referred to as a SIMPLE IRA, is a type of employer-sponsored retirement savings plan that allows employers and their employees to increase the amount they can save for retirement. The SIMPLE IRA is an alternative option for self-employed individuals or small business owners who have 100 employees or fewer.

The rules governing a SIMPLE IRA plan are not as complicated as a 401(k) plan. Contributions made to the plan have the potential to provide the employer with a tax-deduction equivalent to the amount of the contribution made into the account each year. This potential tax benefit is subject to government guidelines. Earnings within the account are tax-deferred until withdrawn, just like a 401(k) plan.

This means that the investment income in these accounts grows without having to be included in the account owner’s annual taxable income. Only when the funds are withdrawn from the account as a distribution will taxes potentially apply.

Key features

  • Tax-deferred growth: Funds are tax-deferred while in the account, which means that you do not have to pay taxes until the funds or assets are withdrawn from the account.
  • Tax deductions: Contributions to a SIMPLE IRA may be tax deductible by a business, provided the employer meets certain requirements.
  • Tax-free component: You may choose to allow Roth contributions in your SIMPLE IRA plan. If certain requirements are met, the accrued earnings may be taken tax-and penalty-free. 
  • Employee retention: This plan may encourage employee retention by providing them with an additional benefit to assist them in saving more for retirement.
  • 100% vested: Contributions made to a SIMPLE IRA are always 100% vested.

$495 per year + $150 establishment fee

Also called a Solo(k), this is a 401(k) for self-employed persons or for employers whose only employee is their spouse.

These plans have the same rules and requirements as other 401(k) plans.

If you own a business, one of the ways you can invest for retirement is through an Individual 401(k)—also known as an “Individual(k) or “Solo(k).” Unlike other small business plans, an Individual 401(k) is suited for business owners who do not have full-time employees other than their spouse.

An Individual 401(k) allows you to invest in time-sensitive, alternative investments such as rental properties, tax liens, private mortgages, and precious metals. These investments could potentially increase the value of your account.

The investment income in this type of account grows without having to be included in annual taxable income of the Individual 401(k) owner, unless the contributions and investments are held under the Roth portion of the plan.

Contributions made to the plan have the potential to provide the account owner with a tax-deduction equivalent to the amount of the contribution made into the account each year. This potential tax benefit is subject to government guidelines.

When funds are withdrawn from your account as a distribution, taxes may be due—however, in retirement, you could find yourself in a lower tax bracket than when you were employed. This means that you could have a lower tax liability on those funds.

Key features

  • Tax-deferred: One of the most notable benefits to a Individual(k) plan is the fact that funds are tax-deferred while in the account. That means that any money you contribute into your Individual 401(k) account is also tax-deferred until withdrawn.
  • Tax deductible: The contributions you make to your Individual(k) plan may also be tax deductible, provided you meet certain requirements.
  • Tax-free component: You may choose to make Roth contributions to your Individual(k) plan. If certain requirements are met, the accrued earnings may be taken tax-and penalty-free. 
  • Personal loan availability*: Individual(k) plans allow for you, the account owner, to take a loan from the 401(k) up to 50% of the value of the plan, or $50,000, whichever is less.
  • Catch-up contributions: If you are age 50 or older, you can make an additional catch-up contribution to your account. 

*Refer to IRC Sec 72(p)(2)(A) as a source for additional details concerning loan availability.

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