A traditional IRA allows to save for retirement that can provide tax advantages. A traditional IRA is an account to which you contribute pre-tax dollars. Your contributions may be fully or partially tax deductible (consult with a CPA) depending on your unique situation. This could provide tax benefits and allows you to invest for your future. The investments in this account will grow tax-deferred until retirement.
With a traditional IRA, will pay income tax on the withdrawals. You can, however, withdraw money from this account penalty free after you reach the age of 59 ½. There are exceptions for withdrawals with no penalty prior to the age of 59 ½, but you will want to consult a CPA for these exceptions.
Benefits of a traditional IRA for retirement
Investment growth will be tax-deferred — Your investment will grow tax deferred with compound interest until retirement.
No income limits on opening an account — There are no income limits to contribute to a traditional IRA, however, there are annual contribution limits. The annual maximum annual contribution limits for 2023:
- $6,500 if you are under the age of 50
- $7,500 if you are age 50 or older
Current year contributions may be tax deductible — You may be able to deduct all or part of your contributions from your federal income taxes. Please consult a tax advisor to determine how much can be deducted from your tax return.
Schedule a Meeting to Learn About Traditional IRA Accounrs
If you are looking to create income for your retirement years, contact Safe Harbor to learn more. We offer a complimentary consultation to review your existing retirement plans and can provide guidance on the right IRA Account solution that will provide the money you need to live comfortably in your golden years. Contact us here or call at 614-760-0670 to schedule your initial consultation or to learn more about traditional IRA accounts.