DayCents

Traditional IRA

A traditional IRA is a tax-deferred retirement account you open yourself. Contributions may be tax-deductible now, the balance grows without yearly taxes, and withdrawals in retirement are taxed as ordinary income. It's the mirror image of a Roth IRA, which taxes you now instead of later.

The 2026 contribution limit is $7,500 (plus a $1,100 catch-up at 50+), shared across all your IRAs. Traditional IRAs carry required minimum distributions starting at 73, and the deduction can phase out if you're covered by a workplace plan.