The individual retirement account (IRA) was first introduced in 1974, and there are now two general types of IRA accounts: traditional IRAs (typically funded with pretax dollars) and the Roth IRA account (always funded with after-tax dollars). In addition, there are also two employer-sponsored retirement plans that involve setting up IRA accounts for each of the eligible employees: the simplified employee pension (SEP-IRA) plan and the SIMPLE IRA plan. We will cover all of these various types of IRA accounts in this module. Note that we have now entered the third column of our retirement plan matrix, and are no longer in qualified plan territory. Despite popular belief, IRA accounts are not considered to be qualified plans, but rather simply "tax advantaged" plans. Since they are "individual" plans they are not subject to ERISA requirements and have their own rules and requirements.
Kristen MacKenzie, MBA, CFP®, CRPC® is an associate professor at the College for Financial Planning. Kristen has over 20 years of experience in the financial services industry, both as an active financial planner and as a provider of financial education. She graduated from the University of Connecticut with a degree in economics and later received her MBA at the University of Colorado.
Michael Angell, CFP®, EA is an associate professor at the College for Financial Planning. He obtained his bachelor's degree in mathematics at Creighton University. His 20+ years of work experience includes banking, insurance, investments, retirement, and estate planning. In addition to his responsibilities at the College, Michael also serves as a private client services advisor with an independent investment firm and is also a federally licensed tax practitioner with a nationally recognized company. You can contact him at Michael.Angell@cffp.edu.