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.
Contribution limits* for 2016 are as follows:
- Age 49 and under: $5,500
- Age 50 and above: $5,500 + $1,000 catch-up
|Eligibility for opening, must be younger than 70 1/2|
|Any earnings from federal income tax-deferred|
|Penalty-free withdrawals for first time home purchases and certain college expenses|
|No taxes until withdrawal|
|Required to begin taking distributions at age 70 1/2|
1 *Contribution limits based on modified annual gross income (modified AGI). Refer to IRS Publication 590 for details.
2 *The tax return filing deadline for 2015 is April 15. Refer to IRS Publication 590 for details.