What Are the Different Types of IRAs?

An Individual Retirement Account, or IRA, is a tax-advantaged retirement account. A Bitcoin IRA is still an IRA -- bitcoin is the asset the account owns.

This is not tax advice and is for educational purposes only. Bitcoin Well does not provide tax or investment advice. Speak with a qualified tax professional about how a Bitcoin IRA applies to your situation.

Traditional IRA

A Traditional IRA generally lets investments grow tax-deferred.

• Contributions may be tax-deductible, depending on your income, workplace retirement-plan coverage and individual circumstances.
• Taxable withdrawals are generally treated as ordinary income.
• The account owner is generally subject to required minimum distribution rules later in life.

Being eligible to contribute does not always mean your contribution will be deductible.

Roth IRA

A Roth IRA uses a different tax treatment.

• Contributions are made with after-tax dollars and are not deductible.
• Qualified distributions may be tax-free.
• Your eligibility to contribute may be reduced or eliminated based on your modified adjusted gross income, or MAGI.
• The original account owner is not generally required to take lifetime required minimum distributions.

The main difference between a Traditional IRA and a Roth IRA is when taxes may apply. Your individual tax result depends on your circumstances.

What does “self-directed IRA” mean?

“Self-directed” is not a separate IRA tax type. It describes who chooses the investment and the range of investments the administrator supports.

A self-directed IRA can be:

• A self-directed Traditional IRA; or
• A self-directed Roth IRA.

The Traditional or Roth designation determines the account's tax treatment. The self-directed designation means the account can support a broader investment menu, which may include bitcoin.

What is a Bitcoin IRA?

A Bitcoin IRA is an IRA that owns bitcoin through a supported administrator, trading and custody process.

In the Bitcoin Well IRA experience:

• You choose whether to buy or sell bitcoin inside the IRA.
• Bitcoin Well provides the bitcoin transaction experience.
• Heritage IRA administers the IRA, processes account directions and completes IRA reporting.

The IRA—not you personally—must fund and own the bitcoin.

Important: Do not buy bitcoin personally and later try to move it into the IRA or label it as IRA-owned. Personal bitcoin and IRA-owned bitcoin must remain separate.

What about SEP and SIMPLE IRAs?

You may also hear about SEP and SIMPLE IRAs.

• A SEP IRA is generally used by employers and eligible self-employed business owners.
• A SIMPLE IRA is generally offered by smaller employers and can include employee and employer contributions.

SEP and SIMPLE IRAs have different eligibility, contribution and distribution rules. The availability of these account types through Bitcoin Well may vary. Confirm account compatibility before moving retirement funds.

Official IRS resource

For more information, review the IRS overview of Individual Retirement Arrangements.

Updated on: 02/10/2026