Traditional IRA

• Plan description
• Key features
• Who can establish
• Annual contributions
• Annual fees

Plan description

An individual retirement plan that permits tax-deferred savings for workers younger than 70½.

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Key features

• Contributions are allowed regardless of the individual's adjusted gross income.
• Contributions may be deductible. Tax deductibility of contributions depends on salary level and whether the IRA owner participates in an employer-sponsored retirement plan.
• Earnings on both deductible and nondeductible contributions accumulate on a tax-deferred basis.
• Withdrawals made prior to 59½ will be taxed as ordinary income and may be subject to an additional 10% tax.

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Who can establish

• Anyone with earned income before the tax year in which 70½ is attained may contribute.
• For married couples filing jointly, a nonworking spouse may also fund an IRA contribution based on the earned income of the working spouse (up to the annual limit).

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Annual contributions

Please see Retirement Plan Limits for the current compensation and contribution limits for this plan.

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Annual fees

$10 per account¹ includes 1099-R and 5498.

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¹$10 per account is drafted automatically unless otherwise instructed.

This information does not constitute tax advice. Please consult your tax advisor about your particular situation.