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| The Traditional IRA |
| Originally established in 1974, traditional IRAs have undergone a number of changes over the years to adjust to changing retirement needs and economic conditions. Throughout these changes, however, traditional IRAs have remained a viable investment vehicle for those looking to save for retirement. Why? For one thing, your contribution to a traditional IRA may be tax-deductible, depending on how much you earn each year. If you qualify, the money you tuck into a traditional IRA isn't taxed until you withdraw it. |
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| Even if your contribution is taxable, it's still a good idea to invest in a traditional IRA, since your assets will grow tax-deferred. Because you don't lose anything to taxes, the full amount of the return you make in any given year sticks around to earn even more money the next year. |
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| So why call it traditional? Because a different kind of IRA—the Roth IRA—was created in 1997 Unlike most sequels, the Roth can be just as good, if not better, than the original IRA for some investors. For those who aren't allowed to use a Roth IRA (because they make too much money), a traditional IRA is still a great thing. |
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| For details on the pros and cons of the traditional IRA, take a look at the chart below. It'll give you the lowdown on all the facts. |
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