Compare Your IRA Options

January 2, 2024

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Each type of IRA has certain restrictions based on your income, tax filing status, employment status and other factors. Be sure to review the information below carefully. Marcus Invest does not offer legal or tax advice. Consult a tax professional or the IRS website for additional information.

Traditional IRA

Roth IRA

SEP IRA (Simplified Employee Pension IRA)

	Traditional IRA	Roth IRA	SEP IRA (Simplified Employee Pension IRA)
Highlights	You may be able to deduct your contributions from your taxable income, depending on your circumstances, and your money is tax-deferred until you withdraw it in retirement.	Your contributions are made with after-tax dollars, but your withdrawals in retirement are tax-free.	This is an option for the self-employed. Your contributions may be tax-deductible, and your money is tax-deferred until you withdraw it in retirement. Generally, the maximum annual contribution limit for SEP IRAs is higher than Traditional and Roth IRAs. A SEP-IRA follows the same investment, distribution, and rollover rules as Traditional IRAs.
Who can contribute	You can contribute if you have taxable employment income.	You can contribute if you have taxable employment income and can meet certain criteria regarding your income and tax filing status.	You can contribute if you are self-employed. Visit the IRS for more information on who can participate in a SEP IRA.
Maximum annual contribution limits	Up to $6,500 for the 2023 tax year ($7,500 for those 50 and older). Up to $7,000 for the 2024 tax year ($8,000 for those 50 and older). See IRS's IRA contribution limits for more information.	Up to $6,500 for the 2023 tax year ($7,500 for those 50 and older). Up to $7,000 for the 2024 tax year ($8,000 for those 50 and older). See IRS's IRA contribution limits for more information.	A percentage of self-employment income up to a maximum contribution of $66,000 for 2023 and $69,000 for 2024.
Tax deduction	Contributions may be tax-deductible if you meet certain eligibility rules. If you or your spouse is covered by a workplace retirement plan (e.g., 401(k)), you may not be able to deduct contributions made to this type of IRA.	Contributions are not tax-deductible.	Contributions may be tax-deductible. Visit the IRS FAQ page for more information.
Withdrawals	Withdrawals prior to the age of 59 ½ are generally subject to income tax and a 10% early withdrawal penalty unless you qualify for an exception. After the age of 59 ½, withdrawals are subject to income tax, but there’s no early withdrawal penalty.	Contributions can be withdrawn tax-free and penalty-free at any time. Withdrawals of earnings prior to the age of 59 ½ (or before the account is 5 years old) are generally subject to income tax unless it’s a qualified distribution and to a 10% early withdrawal penalty unless you qualify for an exception.	SEP IRAs follow the same rules as Traditional IRAs. Withdrawals prior to the age of 59 ½ are generally subject to income tax and a 10% early withdrawal penalty unless you qualify for an exception. After the age of 59 ½, withdrawals are subject to income tax, but there’s no early withdrawal penalty.
Required Minimum Distributions (RMDs)	Required minimum distributions (RMDs) are withdrawals that you must make from Traditional IRAs starting at age 73 (or age 72 if you turned 72 on or before December 31, 2022). RMDs are required by the IRS, and failure to take RMDs may result in penalties. Visit the IRS for more information.	No RMDs if you’re the original owner of the account.	SEP IRAs follow the same rules as Traditional IRAs. Required minimum distributions (RMDs) are withdrawals that you must make from SEP IRAs starting at age 73 (or age 72 if you turned 72 on or before December 31, 2022). RMDs are required by the IRS, and failure to take RMDs may result in penalties. Visit the IRS for more information.

Goldman Sachs does not monitor whether a customer is eligible for a particular type of IRA, or a tax deduction, or if a reduced contribution limit applies to a customer. These are based on a customer’s individual circumstances. You should consult with a tax advisor. Certain IRA options may not be available due to your particular circumstances and IRS qualification rules.

Taking money out of an IRA is not like taking money out of your bank account. Depending on the IRA type you choose, withdrawing money before a certain age may subject you to penalties in addition to income taxes.

Keep in mind that IRA rules and limits are always subject to change. Visit the IRS website or consult a tax professional for the latest information on rules regarding IRA contributions, deductions, withdrawals, and rollovers. For questions regarding Marcus Invest, visit the Marcus FAQ page here.

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