Is A Traditional IRA Right For You?
Traditional IRAs allow your assets to grow tax-deferred until withdrawn at retirement. Contributions to a traditional IRA may be tax-deductible (depending on your adjusted gross income), offering you the potential for tax savings today. Money may also be withdrawn penalty-free if it falls within certain guidelines. To help you make a better informed decision about whether or not a traditional IRA is suitable for you, review the key features listed below.
Key features of a traditional IRA
Under age 70½ with earned compensation.
Maximum Annual Contribution Limit
2015 to 2017: $5,500.
(This is the maximum total that may be contributed to all of your IRA accounts annually.)
Over age 50 (as of the end of the calendar year), you may contribute an additional $1,000 annually.
Assets grow tax-deferred without penalties or tax consequences until withdrawal.
The amount of the contribution may be tax-deductible, depending on your adjusted gross income (AGI) and your participation in an employer-sponsored retirement plan.
Single: Less than $62,000.
Married Filing Jointly: Less than $99,000 or less.
Single: More than $62,000 but less than $72,000.
Married Filing Jointly: More than $99,000 but less than $119,000.
Required minimum distributions must start at age 70½.
If you are under age 59½ and your withdrawal is not for one of the following reasons, the withdrawal may be subject to a 10% early withdrawal penalty:
- Death or disability of account owner
- Part of a series of substantially equal periodic payments
- Certain major medical expenses
- Medical insurance premiums while unemployed
- Qualified first-time home purchase
- Qualified higher education expenses
- IRS levy
- Qualified reservist distribution