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 72
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