| Traditional IRA | May qualify for tax deduction. |
| Can contribute up to $5,000 for the year, or up to $6,000 if you're 50 or older in 2008. Contributions for the previous year can be made through April 15, 2009. The same contribution limits apply to the 2009 tax year. |
| Can take money out for qualified events without penalty. |
| Taxed as ordinary income, which could be a tax rate as high as 35 percent, when you start taking distributions. |
| Can start taking money regularly at 59½. |
| Required to start taking money out after age 70½. |
| Can't contribute after age 70½. |
| Roth IRA | Can contribute up to $5,000 for the year, or up to $6,000 if you're 50 or older in 2008. Contributions for the previous year can be made through April 15, 2009. The same contribution limits apply to the 2009 tax year. |
| No tax deduction. |
| Can take out the money you've contributed at any time without penalty. |
| Can withdraw earnings after five years for qualified events. |
| Money not taxed when you take it out at retirement. |
| Don't have to take distributions at 70½. |
| Can contribute past age 70½. |
| Income limit: $101,000 to $116,000 for singles; $159,000 to $169,000 for married couples. |
| 401(k) | Contributions taken out of paycheck before payroll taxes are calculated. |
| Can save up to $15,500 for the year ($20,500 if you're 50-plus) in 2008. In 2009, the limits increase to $16,500 and $22,000 for 50-or-older employees. |
| Can retire as early as 55. |
| Must take distributions at 70½, unless still working at same company. |
| Can contribute past 70½. |
| Federally protected from creditors. |
| Limited to the plan your employer designs/selects. |
| May or may not be able to borrow. |
| May or may not have matching contributions from employer. |
| Matching may be vested. |
| SIMPLE IRA | Contributions taken from paycheck. |
| Can contribute 100 percent of income, up to $10,500 in 2008; $13,000 if you're 50 or older. For 2009, the limits are $11,500 and $14,000 if you're 50 or older. |
| Employer matching. |
| Immediately vested. |
| Option for self-employed. |
| SEP-IRA | Employees can contribute up to $46,000 for the year in 2008; $49,000 for the year in 2009, with annual cost-of-living adjustments for later years. |
| Functions like an IRA. |
| Option for self-employed. |
| No annual reporting requirements. |
| Solo 401(k) | Can contribute 100 percent of income, up to $15,500 for the year in 2008 ($20,500 if you're 50-plus); in 2009, the limits are $16,500 ($22,000 if you're 50-plus). |
| Additional "employer's" contribution of up to 25 percent of yearly business revenue if incorporated (20 percent if a sole proprietor), with the 2008 cap set at $46,000 and a 2009 limit of $49,000. |
| Option for self-employed. |
| Additional paperwork and tax forms required. |
| Roth 401(k) | Contributions taken out of paycheck. |
| Can save up to $15,500 for the year ($20,500 if you're 50-plus) in 2008. In 2009, the limits increase to $16,500 and $22,000 for 50-or-older employees. |
| No immediate tax benefit since money contributed is after tax. |
| Contributions still grow tax-free. |
| Money not taxed when you take it out at retirement. |
| Can take distributions when you reach age 59½ and have held account for five or more years. |
| There are no income eligibility limits for Roth 401(k) plans. |
| Federally protected from creditors. |
| Limited to the plan your employer designs/selects. |
| May or may not be able to borrow. |
| May or may not have matching contributions from employer. |
| Matching may be vested. |
| Relatively new plan option, so not many employers offer it. |
| A similar Roth 403(b) plan exists for workers in the nonprofit sector. |