Traditional IRA

Traditional IRAs are tax-deferred individual retirement savings accounts. Most people are familiar with the fact that most Traditional IRA contributions may be tax deductible.  You realize the tax advantage in the present but are obligated to pay taxes on future distributions. You cannot make contributions after you trun 70-1/2 and you must start taking mandatory required distributions (MRD)  the year after you turn 70-1/2.

IRS Publication 590-A provides details on opening, contributing and taking distributions from a Traditional IRA.

Roth IRA

Roth IRAs are individual retirement savings accounts that offer individuals the ability to grow retirement savings tax free.  You most likely can contribute to a Roth IRA if you have taxable compensation and your modified adjusted gross income is below certain amounts.

Unlike a Traditional IRA, you cannot deduct contributions to a Roth.  However, if you satify the requirements, qualified distributions are tax free.   Contributions can be made to your Roth IRA after you reach the age of 701/2 and you can leave amounts in your Roth IRA as long as you live.

Review Chapter 2 of IRS Publication 590A for more details on setting up, contributing and taking distributions from a Roth IRA.

Rollover IRA

A Rollover IRA is a Traditional IRA often used for rollovers from a former employer’s retirement plan, such as a 401(k), when you expect to roll those funds into a new employer’s plan.


SEP plans provide a simplified method for an employer to make contributions to a retirement plan for the business owner and his or her employees. Instead of incurring the expense of setting up a profit-sharing or money purchase plan with a trust, the business owner can easily adopt a SEP agreement and make contributions directly to an IRA set up for the owner and each eligible employee up to 25 percent of each employee’s pay.

SEP IRA plans are easy to setup and easy to administer retirement savings plans for business owners and their employees available from M2 Trust Services.

For more detailed information on SEP IRAs, review IRS Publication 560.

Simple IRA

If a business owner has 100 or fewer employees who received at least $5,000 in compensation last year, a SIMPLE IRA plan can be established. Under a SIMPLE plan, employees can choose to make salary reduction contributions rather than receiving these amounts as part of their regular pay. In addition, the business owner must either make a matching contribution of up to 3% of compensation or make a 2% of nonelective contribution for each eligible emplyee (up to an annual compensation limit of $255,000).

Simple IRA plans offer business owners another retirement savings plan that is easy to setup and easy to administer.  The primary difference between a Simple IRA plan and an IRA plan is the under a Simple Plan, the employer is required to make contributions to the employees individual plans.

Read up on Simple IRA plans by clicking this link and reviewing Chapter 3 of IRS Publication 560.


Rollovers for Funding a Self-directed IRA

A method for significantly funding a Self-directed IRA is by rolling over funds from a Qualified Plan sponsored by a former employer.

Click here to review a helpful Rollover Reference Chart created by the IRS.