A Traditional IRA is a retirement account where contributions are typically tax deductible. Any profits grow tax-deferred and, upon withdrawal, are taxed at the account holder’s ordinary tax rate. Owners are allowed to contribute up to $5,500, or $6,500 if they are 50 years or older, of tax-deferred income per year until the owner becomes 70.5 years old. Owners of Traditional IRAs can start taking distributions once they reach 59.5 years old and must begin taking distributions by April 1st of the year after they become 70.5.

For more information on about Traditional IRAs, visit the IRS website.

Are you looking for a Roth IRA instead? Click here.