Potential for tax-deferred growth
- Use the IRA Selector tool to see if you qualify for a Traditional or a Roth IRA
- All investment earnings are tax-deferred; pay taxes only when distributions are taken
- Make tax-deductible contributions, depending on income2
- Automate your retirement investing with Core Portfolios (low $500 minimum)
- Enjoy fast, easy withdrawals at age 59½ with free cash management features3
(if under age 50)
(if age 50 or older)
Why open a Traditional IRA?
A Traditional IRA may give you a potential tax break because pre-tax contributions lower annual taxable income.
Compare investment accounts to see if a Traditional IRA account is right for you.
Contributions can be made on a pre-tax basis and may be tax-deductible depending on income
Withdraw assets penalty-free at any time for a qualified first time home purchase, qualified higher education costs, or certain major medical expenses4
No annual IRA fees and no account minimums
Transaction fees, fund expenses, brokerage commissions, and service fees may apply
Access to a wide range of investment choices
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What are the eligibility requirements for Traditional IRA?
- Must be 18 years of age or older with taxable compensation
- Must have MAGI (Modified Adjusted Gross Income) under certain thresholds to make tax deductible contributions
- To apply online, you must be a US citizen or resident
- Can open and make a contribution to your Traditional IRA for a tax year at any time during the tax year or by your individual federal tax return filing deadline (not including extensions). This date is generally April 15 of each year. Applications postmarked by this date will be accepted.
- Participation in an employer-sponsored retirement plans, such as a 401(k), 403(b), or 457 plan, may impact your ability to make tax deductible contributions to your Traditional IRA. If neither you nor your spouse participate in an employer-sponsored plan, you may be able to make a contribution to your Traditional IRA that is fully deductible.
- If taxpayer participates in an employer-sponsored retirement plan, and if taxpayer’s MAGI is $68,000 or less in 2022, taxpayer may be eligible to deduct the entire contribution. If taxpayer’s MAGI is more than $68,000 but less than $78,000 in 2022, taxpayer may be eligible to deduct part of the contribution. Taxpayer is not eligible to make a tax deductible contribution if MAGI is $78,000 or more in 2022.
- If taxpayer participates in an employer-sponsored retirement plan, and if taxpayer’s MAGI is $109,000 or less in 2022, taxpayer may be eligible to deduct the entire contribution. If taxpayer’s MAGI is more than $109,000 but less than $129,000 in 2022, taxpayer may be eligible to deduct part of the contribution. Taxpayer is not eligible to make a tax deductible contribution if MAGI is $129,000 or more in 2022.
- If taxpayer does not participant in an employer-sponsored retirement plan, but taxpayer’s spouse does, then the MAGI limits are different. If taxpayer’s MAGI is $204,000 or less in 2022, taxpayer may be eligible to deduct the entire contribution. If taxpayer’s MAGI is more than $204,000 but less than $214,000 in 2022, taxpayer may be eligible to deduct part of the contribution. Taxpayer is not eligible to make a tax deductible contribution if MAGI is $214,000 or more in 2022, and taxpayer’s spouse participates in an employer-sponsored retirement plan.
How can an investor contribute to an IRA?
An investor can contribute to an IRA account by transferring funds online from a bank or brokerage account, sending a check, or completing a wire transfer. For more information about ways to make a deposit to an account, see the Help topic, Contribute to an IRA account.
An investor is allowed to contribute 100% of earned income up to the annual contribution limit. View IRA Contribution Limits and Deadlines to learn more.
How can one determine whether a Traditional IRA contribution is tax-deductible?
Determining if an investor can deduct all or part of their Traditional IRA contribution is based on whether they have a retirement plan at work, their tax filing status, and modified adjusted gross income (MAGI). To determine the exact amount of a deductible contribution, use the IRA Selector or view IRA Contribution Limits and Deadlines to learn more.
Can an investor have an IRA even if they contribute to their employer’s 401(k) plan?
This is a common myth about retirement investing. An investor may still contribute to an IRA even if they participate in an employer-sponsored retirement plan. However, they may not be able to deduct a Traditional IRA contribution if they exceed certain income limits. View IRA Contribution Limits and Deadlines to learn more.
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Tax-free growth potential retirement investing
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