Traditional IRA

Benefits of a Traditional IRA

A Traditional Individual Retirement Account (IRA) allows you to save funds without paying taxes on the contributions or the income accrued on those contributions until later. With a Traditional IRA, you may deduct your contributions on your income taxes to further increase your savings.*

Roth Vs Traditional IRA

When considering a Roth vs a Traditional IRA, it is important to consider tax implications and age distribution requirements. Below is a comparison of the Roth vs Traditional IRA.

• A Traditional IRA allows you to defer paying tax on contributions and income until you reach age 59-1/2 or older and begin making withdrawals.
• Roth IRA contributions are made with after-tax money, which means you will not pay tax on the contribution again in the future.
• There are no income requirements with a Traditional IRA, but a Roth IRA requires account holders earn no more than $105,000 individually or $166,000 if filing jointly with a spouse.
• Anyone under the age of 70-1/2 can invest in a Traditional IRA, where Roth IRA accountholders can be any age.

Traditional IRA Contribution

Traditional IRA account holders may contribute $5,000 annually. There are no “catch up” contributions allowed with Traditional IRA accounts. In other words, if you contribute $1,000 in one year, you cannot contribute $9,000 the following year.

Individuals over the age of 50 are allowed to contribute an additional $1,000 for a total $6,000 each year. You may reach your contribution limit with one lump sum or you can make several contributions over the course of the year.

Our Traditional Individual Retirement Account Guide provides more information on Traditional IRAs or you can call us at 1-888-905-2165 to find out if a Traditional IRA is right for you. Our rates page also provides more information on Traditional IRA rates.

*Consult with your tax advisor. Certain requirements must be met to receive tax savings.