Traditional IRA

A Traditional IRA is the oldest and most common type of Individual Retirement Account. A Traditional IRA grows on a tax-deferred basis and contributions may be fully deductible, partially deductible or non-deductible. If you have earned income, you can contribute to a traditional IRA until you are 70 years of age.

Reasons to consider a Traditional IRA:

 You anticipate your tax rate at retirement to be lower than your current tax rate.

 You are not eligible to make a Roth IRA contribution because your income exceeds the limitation (See More Information about Roth IRAs).

 You need a tax deduction to lower your current tax bill and qualify to make a deductible IRA contribution.

  You have a 401(k) or other account in a former employer's plan and you want to self-direct the funds through a Self-Directed IRA.

If you are eligible to contribute to an IRA, the amount you can deduct from your taxes will depend on whether you (or, in some cases, your spouse) are an active participant in a retirement plan at work. (See Internal Revenue Service Publication 590-A for more information.)

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