The Traditional IRA is a tax-deferred account (contributions are made with pre-tax dollars and are tax deductible) that allows money to compound tax-free until funds are withdrawn. All earnings in a Traditional IRA are tax-deferred until withdrawals.

Anyone who is under the age of 70½ and has earned income* is eligible for a Traditional IRA.

*Compensation. Compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts received for providing personal services. It also includes commissions, self-employment income, and taxable alimony and separate maintenance payments.

Created in 1997 by Senator Roth of Delaware, the Roth IRA is a tax-free (contributions are made with after-tax dollars and are NOT tax deductible) savings plan. All funds within the Roth IRA compound tax-free and all withdrawals from the account are tax-free as well (as long as the account has been opened for 5 years).

One of the main benefits to a Roth IRA is there is no required mandatory distribution (RMD) at age 70½. Individuals can continue to contribute as long as they like and all withdrawals are tax-free (as long as the account has been opened for 5 years).

Anyone who has earned income and falls within the MAGI (Modified Adjusted Gross Income) limits can establish a Roth IRA. Click here for Roth IRA eligibility requirements.

Contributions to a SEP are tax deductible and compound tax-deferred until withdrawal. An employer may contribute up to 25% of each employee’s annual compensation with a maximum of $50,000.

The SIMPLE is popular with investors paying themselves less than $42,000 per year. With a SIMPLE plan, contributions are tax deductible and compound tax-deferred until withdrawal. SIMPLE allows employee contributions up to $11,500 if you are under age 50, and $14,000 if age 50 and over.

Employers are generally required to match each employee's salary reduction contributions on a dollar-for-dollar basis up to 3% of the employee's compensation.

The Solo 401(k) is designed for owner-only businesses and spouses. It can be established by both incorporated and unincorporated businesses, sole proprietorships, partnership and corporations. You can contribute $17,000 annually ($22,500 if you are 50+) through salary deferral, plus a profit-sharing portion of 0-25% of your salary. The limit from both sources is $50,000 ($55,500 if you are 50+).

In 2006, Congress merged two of the most popular types of retirement savings plans, the Roth IRA and the Solo 401(k) into a Roth Solo 401(k). The same contribution limits apply as the Solo 401(k), but you can designate the contributions you make (up to $17,000 annually if you are under 50, $22,500 if you are 50+) thru salary deferral as Roth contributions.

If you want Roth tax-advantages (tax-free distributions) with a substantial contribution limit than the Roth Solo 401(k) is for you. Also, if you were interested in a Roth IRA, but you don’t qualify because of income limits, then the Roth Solo 401(k) is an option to consider.

The 401(k) is attractive to employers and employees because of the high contribution amounts and large tax deductions available, plus the ability to truly self direct investments in traditional and non-traditional assets.

Two components comprise the maximum 401(k) plan contribution: an employee salary deferral contribution and an employer profit sharing contribution. The employee is able to contribute up to $17,000 through salary deferral, although this may not exceed 100% of pay. The employer profit sharing contribution limit is up to 25% of pay.

The total contribution limit from both sources is $50,000. However, under a "catch up" provision, individuals age 50+ may contribute an additional $5,500 in salary deferrals beyond the $17,000, allowing for a total contribution limit of $55,500.

Investors don’t have to worry about income limits and they can still receive similar tax treatment as the Roth IRA. The Roth 401(k) allows participants to put some of their wages into a 401(k) plan as Roth contributions that, upon distribution, will result in tax treatment similar to distribution from Roth IRAs

HSA contributions are tax-deductible (subject to limitations) and withdrawals are tax-free when used for qualifying medical expenses. An individual may contribute $3,100 and a family may contribute $6,250 annually.

The CESA allows individuals to invest funds for educational purposes. This trust or custodial account is created for the purpose of paying qualified education expenses of the designated beneficiary of the account.

Contribute up to $2,000 annually and invest in assets you know best. All profits from the investments compound tax-free and all distributions are tax-free if used for qualified educational expenses.