IRAs, or Individual Retirement Accounts, are available at most large financial institutions as well as Fidelity bank, T. Rowe Price and Vanguard. They are also opened at mutual fund companies, banks and brokerage firms. The differences between the locations are thecosts to open the IRA, otherwise known as the fee structure to set up the account, maintain the account and close the account.
An IRA is a form of savings account. There are several different types of IRAs, the difference being when the owner pays taxes on the funds in the plan as well as how each IRA is set up for withdrawal and who can contribute, as stated by CNN.
With a traditional IRA, taxes are due when the money is withdrawn at the time of retirement or at age 70 and a half.
A Roth IRA is easier to maintain in that there are no penalties to withdrawing the money early. The difference between the Roth and traditional IRA is thattaxes are due on the first contribution.
A SEP IRA or Simplified Employee Pension, allows employers to contribute to the fund. Any business with one or more employees can set up a SEP IRA. With a SEP IRA, only the employer can contribute.
A SIMPLE IRA or Savings Incentive Match Plan for Employees is also for small businesses as well asself-employed individuals. Unlike the SEP IRA, employees can contribute to the SIMPLE IRA along with their employers.