Individual retirement accounts (IRAs) are available in multiple forms, but the two most commonly recognized types are Traditional IRAs and Roth IRAs. Additional options are the Simplified Employee Pension (SEP) IRA and the Savings Incentive Match Plan for Employees (SIMPLE) IRA, which are generally considered alternatives to employer contribution plans. This paper will focus on the first two types, Traditional and Roth IRAs.
An IRA can be either a primary retirement savings vehicle or a way to supplement retirement savings when an employee has a workplace plan. When a workplace plan is unavailable, an individual should prioritize an IRA as the primary method of saving for retirement. An individual can contribute to a Traditional IRA even when participating in a workplace retirement plan; however, the individual’s income level may place some limitations
on their ability to contribute to a Roth IRA (https://www.irs.gov/publications/p590a) and tax deductibility may not apply for Traditional IRA contributions.