Traditional IRA
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.
Tax advantages
| Contributions | Tax-deductible contributions |
| Earnings | Any earnings grow federal income tax-deferred. |
| Withdrawals | 10% early withdrawal penalty may apply for other withdrawals taken prior to age 59½ if no exceptions apply.
Penalty-free withdrawals for first home purchase and certain college expenses Minimum required distributions (MRDs) starting at age 70½ |
Account features
| Eligibility | Individuals less than 70½ years of age
Must have employment compensation |
| Maximum contribution | 2012: $5,000 ($6,000 if age 50 or older)
2013: $5,500 ($6,500 if age 50 or older) |
| Investment options | A wide range of mutual funds, stocks, bonds, ETFs |
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