Traditional IRA

What Is It

A Traditional IRA lets you contribute pre-tax (or tax-deductible) dollars, which lowers your taxable income the year you contribute. The money grows tax-deferred, and you pay ordinary income tax on withdrawals in retirement — the opposite sequence from a Roth IRA, which taxes the money going in instead of coming out.

Still deciding between the two? The Roth vs. Traditional Calculator can help you figure out which fits your situation better.

Why It Matters

Unlike a Roth IRA, there’s no income limit on who can contribute to a Traditional IRA — but if you (or your spouse) are covered by a workplace retirement plan, how much of that contribution you can actually deduct phases out between $81,000–$91,000 of income for single filers in 2026. Traditional IRAs are also subject to required minimum distributions starting at age 73, unlike Roth IRAs.

See exactly what’s deductible for your situation — this varies more than most people realize:

Quick Example

Contribute $7,500 to a Traditional IRA in the 22% tax bracket, and your taxable income drops by that same $7,500 — an immediate $1,650 tax savings this year. That tax bill isn’t gone, just deferred: you’ll owe ordinary income tax on withdrawals once you start taking them in retirement.

Try It Yourself

See how the tax-deferred growth compares to what you’d keep after paying tax on withdrawals down the road.

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