With a traditional IRA, your contributions are tax-deductible, meaning you won’t pay taxes on your money until retirement. If you expect your tax rate during retirement to be lower than it is today, or if you want to reduce taxable income now, this option may be a better fit for you.
- Contribute $7,000 if you're under age 50 / $8,000 if you're age 50 or older1
- Contributions may be tax-deductible if you meet certain conditions1
- Withdraw funds without penalty beginning at age 59½. Withdraw before 59½ at 10 percent penalty (plus possible bank fees), with certain exceptions1
- Distributions must begin by April 1st of the year following the year you reach age 732
- Anyone who has earned income is eligible2
- Traditional IRAs can generally be converted to Roth IRAs, although tax consequences may apply1