human
I've heard that there are several different types of IRAs. What are the differences?
assistant
The most common type is the Traditional IRA, which allows you to contribute up to $6,000 per year ($7,000 if you're 50 or older). Contributions are made with pre-tax dollars and grow tax-deferred until withdrawn. A Roth IRA is another popular option, where contributions aren't tax-deductible but withdrawals are tax-free. Additionally, SEP IRAs and SIMPLE IRAs are other retirement accounts available for small businesses and self-employed individuals.