A traditional IRA is a type of retirement plan that has been in existence since 1975. Traditional IRA's offer tax-deferred earnings, and the possibility for tax-deductible contributions. These tax advantages make the traditional IRA a powerful tool in creating your balance, long-term savings plan.
The Roth IRA is a new kind of individual retirement account created by the Taxpayer Relief Act of 1997. Named for Senate Finance Committee Chairman William Roth, Jr. (R-DE), this IRA offers more incentives to boost your retirement savings, as well as more ways to use your nest egg.
Coverdell Education Savings Account
The Coverdell Education Savings Account is a new kind of tax-advantaged savings account created by the Taxpayer Relief Act of 1997. This IRA's sole purpose is to help you pay for your child's higher-education expenses, such as tuition, fees, books, supplies, and equipment. In some cases, room and board is also a qualified expense.