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.
|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
|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|