Traditional IRA

An individual retirement account (IRA) is a personal savings plan that offers specific tax benefits while helping you achieve your retirement goals.  IRAs are one of the most powerful retirement savings tools available to you. Even if you're contributing to a 401(k) or other plan at work, you should also consider investing in an IRA. 

You should understand the differences between a Traditional IRA and a Roth IRA before choosing the type of IRA that's best for you. Traditional IRA contributions can be deductible or nondeductible.  Once you turn age 70 ½, you are required to take a minimum distribution each year.


  • Contributions can be tax-deductible or non-tax deductible (Consult with your
    tax advisor)
  • Earnings grow tax-deferred until withdrawn after age 59 ½, at which time they are taxed at your current rate
  • Wide range of investment options available


  • Minimum annual withdrawals are required when you reach age 70 ½ (known as required minimum distributions)
  • Your ability to make deductible contributions may be reduced or eliminated if you are covered by an employer-sponsored retirement plan, and varies based on your income
  • No contributions can be made after age 70 ½
  • Beneficiaries pay income tax on proceeds after your death
  • In 2010, most taxpayers regardless of income or tax filing status will be able to convert a Traditional IRA to a Roth IRA.


  • Anyone under age 70 ½ who has earned income equal to or greater than their IRA contribution amount.

    • If you contribute to an employer-sponsored plan such as a 401(k) you may still be eligible to contribute to a Traditional IRA
    • If you have no earned income but your spouse earns enough income to cover your contribution as well as their own, you can contribute to a Traditional IRA
Income Limits
  • No limits for non-deductible contributions
Annual Contribution Limits1
  • $5,000 under age 50
  • $1,000 additional catch-up contribution if age 50 and over
  • You may contribute simultaneously to a Traditional IRA and a Roth IRA (subject to eligibility) as long as the total contributed to all (Traditional and Roth IRAs) does not exceed described limits 
Tax Considerations (See your tax advisor)
  • Your contribution may be tax-deductible if any of the following apply:

    • Neither you nor your spouse is covered by an employer-sponsored retirement plan
    • You are covered by an employer-sponsored retirement plan and your Modified Adjusted Gross Income (MAGI) is under $61,000 as a single tax filer or $98,000 as a joint filer
    • You do not participate in an employer-sponsored retirement plan, but your spouse does and your joint MAGI is no more than $183,000
Types of Investments
  • Stocks, bonds, mutual funds, exchange-traded funds (ETFs), U.S. Treasuries, Brokered CDs, unit investment trusts (UITs) and annuities
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  1. Limits apply for 2015 and are subject to change in the future.
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