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Primary IRA Account Types (2026)

There are four distinct legal structures for Individual Retirement Arrangements (IRAs). While they share a common purpose, they differ in contribution limits and eligibility.

• Traditional IRA: The standard individual account. Contributions may be tax-deductible depending on your income and workplace plan coverage. Earnings grow tax-deferred until withdrawal.
   
• Roth IRA: An individual account funded with after-tax dollars. Qualified withdrawals in retirement are tax-free. As of 2026, it remains subject to income phase-out limits.
   
• SEP IRA (Simplified Employee Pension): Primarily for self-employed individuals and small business owners. For 2026, these plans now allow Roth designations in addition to traditional pre-tax contributions.
   
• SIMPLE IRA: Designed for small businesses (typically 100 or fewer employees). Like SEP IRAs, 2026 rules allow these to be set up as Roth SIMPLE IRAs.

Funding Designations & Strategies

The following terms describe how an IRA is funded or managed, rather than being a separate legal account type:

• Spousal IRA: A strategy allowing a working spouse to contribute to a Traditional or Roth IRA held in the name of a non-working spouse.
   
• Non-Deductible IRA: A Traditional IRA funded with after-tax dollars (typically when income is too high for a deduction). The "basis" is tracked to ensure the original contribution isn't taxed twice.
   
• Self-Directed IRA (SDIRA): A Traditional or Roth IRA held by a specific custodian that allows for alternative investments like real estate, precious metals, or private equity.

2026 Contribution Quick-Reference

*Limits may be higher ($18,100) for businesses with 25 or fewer employees. **Standard SEPs do not offer catch-up contributions.