Why is a Traditional IRA different than a Roth IRA?
The main difference is in the possible tax treatment. Funds you contribute to a Traditional IRA may be tax deductible, and you do not pay taxes until you begin to withdraw money during retirement. With a Roth IRA, your contributions are not tax deductible, and your earnings are not taxed. There are income restrictions and other differences, always consult a tax professional to see what is possible for your specific situation.
When can I withdraw money from my Traditional IRA?
With a Traditional IRA, you can withdraw at anytime, but will pay a 10% penalty plus income taxes if you make a withdrawal before age 59 ½.
What is the maximum per year I can contribute to my Traditional IRA?
There are several factors that play into your specific contribution limit, and it can change from year to year. We recommend you consult a tax professional or the IRS website for the most current information.
Deferring taxes on your
Traditional IRA means all
of your dividends, interest,
and capital gains can
compound yearly without
being taxed - allowing your
savings to grow much faster
than a taxable account.