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Traditional IRA Accounts

 

With a Traditional IRA, you make contributions with money you may be able to deduct on your tax return. Any earnings potentially grow tax-deferred until you withdraw them in retirement.

 

Benefits

  • Contributions are tax deductible
  • Penalty-free withdrawals after age 59 1/2 
  • No Income limits on participation
  • Contributions are protected from creditors
  • Can be set up with another retirement plan

 

Advantages

Eligibility
  • Includes individuals less than 72 years of age
  • Must have earned income
  • Must have earned income
2019 & 2020 Contributions
  • Contributions may be tax deductible with a maximum contribution of $6,000 ($7,000 if age 50 or older)
Earnings
  • Earnings can grow tax deferred
Withdrawals
  • After age 59 1/2 withdrawals are penalty-free, but taxed as current income
  • 10% early withdrawal penalty may apply for withdrawals taken prior to age 59½
  • Minimum required distributions (MRDs) starting at age 72 in 2020
Funding Your Account
  • Use earned income
  • Rollover funds from a 401(k)
  • Transfer an IRA