Review:
Traditional Ira
overall review score: 4.5
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score is between 0 and 5
A traditional Individual Retirement Account (IRA) is a tax-deferred retirement savings account that allows individuals to save for retirement with tax-deductible contributions.
Key Features
- Tax-deferred growth on contributions and earnings
- Contributions may be tax-deductible depending on income level and other factors
- Withdrawals are taxed as ordinary income
- Required minimum distributions (RMDs) starting at age 72
Pros
- Tax-deferred growth can help savings grow faster
- Contributions may be tax-deductible, providing immediate tax benefits
- Flexibility in investment options, including stocks, bonds, and mutual funds
Cons
- Penalties for early withdrawals before age 59½
- Required minimum distributions may limit flexibility in managing retirement income