What is a Traditional IRA?
A Traditional IRA is a pre-tax retirement account; saving money with this account lowers your gross income (and thus your taxes) today and you pay taxes when you withdraw funds in retirement.
When you stop working and have to start withdrawing money from your retirement accounts, you have to decide the best way to withdraw money from different accounts. Do you take money out of your tax-free accounts like Roth IRA and Roth 401(k) first? Or do you withdraw from your tax-deferred accounts like Traditional IRA and … Read more
You are probably aware of the importance of saving for retirement through a tax-advantaged retirement account. One of the best ways to grow your wealth efficiently is to do so with a Roth IRA which grows tax free — you put after-tax dollars into an investment account, and when it comes time to withdraw the … Read more
When you leave your job, you have four options for the money in your 401(k) plan. You can cash out the money, keep it in your current plan, or move it to another qualified retirement account (i.e., your new employer’s 401(k) plan, a Traditional IRA, or a Roth IRA). The action of moving money out … Read more
The contribution limit for IRAs increased by $500 for 2019 to $6,000. The maximum you may contribute to all of your Traditional and Roth IRAs combined is the lesser of $6,000, or the amount of your taxable compensation for 2019 (and $5,500 for 2018). If you are 50 years of age or older before the … Read more
There is a limit which is set by the IRS every year for both Roth and Traditional IRA accounts. The current IRA contribution limits for those under 50 is $5,000 and for those over 50 it is $6,000. This allows for what is called a catch up. What is important in making the decision between … Read more
Traditional IRAs can give you a tax break and grow tax-deferred. Roth IRAs are funded by after-tax money and grow tax-free. Along with your 401(k), IRAs will likely constitute the bulk of your retirement savings. But IRAs can also be used for non-retirement purposes. If you’re buying your first home or paying for college, you … Read more