What is a Traditional IRA?
Traditional IRAs can be a smart solution to increase your tax-deferred retirement savings.
A Traditional Individual Retirement Account (IRA) is a long-term investment account to which an account owner can contribute pre-tax or after-tax dollars.
The benefit of a Traditional IRA over other investment accounts comes in tax savings if your contributions are tax-deductible. Money in this IRA grows tax-deferred and the account owner pays ordinary income tax on their withdrawals. The owner must start taking distributions after age 73 (72 for those who turned 72 in 2022 or earlier; 70½ for those who turned 70½ in 2019 or earlier).
Unlike a Roth IRA, opening a Traditional IRA does not have income limitations, making it a good option for those who expect to be in the same or a lower tax bracket in the future.
2023-2024 Traditional IRA Tax-Deductible Contribution Limits
While there is no income limit for a Traditional IRA, there are limits to the tax-deductible contribution an account owner can make.
Tax-deductible limit for owners under 50: $6,500 (for 2023) and $7,000 (for 2024)
Tax-deductible limit for owners over 50: $7,500 (for 2023) and $8,000 (for 2024)
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