With Kopp Financial Online Advising, you may choose from the following accounts:
1) Roth IRA - Our preferred retirement account. You contribute after-tax dollars and your earnings and capital gains grow tax free. A 10% penalty applies if you withdraw before age 59 1/2. This is the best choice if you are looking to grow your money over a long period of time.
2) Traditional IRA - Another retirement account that lets you contribute pre-tax dollars. Earnings and capital gains can accumulate in the account but are taxed when you withdraw them. You also must start withdrawing funds in retirement once you reach certain age limits, and this is another reason we prefer Roth IRAs. We typically only recommend this account if you are looking to transfer an existing traditional IRA to Kopp Financial.
3) Non-retirement account - If you are already maxing out your retirement account contributions, or if you will need access to your funds prior to your retirement, you may want to open a regular taxable account. You contribute after-tax dollars, and any earnings or capital gains are immediately taxable.
So to summarize, if you want an account for retirement, go with a Roth. If you need the funds prior to retirement, setup a non-retirement account. Only use the traditional IRA if you are transferring an existing traditional IRA.