Allows individuals to direct pretax income, up to specific annual limits, toward investments that can grow tax-deferred. These IRAs are subject to investment risk and are not insured by the FDIC.
- Contributions are often tax-deductible, and the taxpayer gets the tax benefit immediately
- There is always an option to convert to a Roth IRA, whereas a Roth IRA cannot be converted back into a Traditional IRA
- If a taxpayer expects to be in a lower tax bracket in retirement than during working years, then a traditional IRA offers an increased incentive over the Roth IRA
- You must meet the eligibility requirements to qualify for tax benefits
- All withdrawals from a Traditional IRA are included in gross income and subject to federal income tax, with a few exceptions
- Traditional IRAs have forced distributions based on age. Withdrawals must begin by age 70½
As with any investment plan, please contact your tax advisor for questions on how the plan might affect your taxes.
Contact your Starion Investment Representative to learn more