Traditional IRAs are the most common retirement plans, which can be used by anyone with earned income.
- Contributions are made on a pre-tax basis and are tax-deductible for income earned the year the contribution is made.
- Assets are purchased on a tax-deferred basis using IRA funds.
- Distributions can be taken at the age of 59 ½ and are taxed at that time.
- You may take distributions under the age of 59 ½ without incurring a 10 percent early-withdrawal penalty for qualified special circumstances. Check with your financial or tax advisor to ensure doing so falls within IRS regulations for these transactions.
- Self-directed traditional IRAs can invest in many alternative investments chosen by the account owner, based on his or her own knowledge.