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Traditional IRA
Is a Traditional IRA right for you?
Benefits of a Traditional IRA
- Contributions to a Traditional IRA may be tax deductible (depending on income level).
- Earnings can grow federal tax-deferred.
- Starting in tax year 2020, a Traditional IRA is available to everyone who earns income.
Why open a TD Ameritrade Traditional IRA?
- Breadth of Investment Choices - Including commission-free ETFs, no-transaction-fee mutual funds1, fixed income products, and much more.
- Empowering Education - We offer exclusive videos, useful tools, and webcasts to help you create a personalized retirement plan.
- Smart Tools – Plan and evaluate your retirement strategy with helpful tools like the IRA Selection Tool and Retirement Calculator.
- Fair and Objective Research - Take control with objective third-party research provided by Morningstar Investment Management, CFRA (formerly S&P Capital IQ), and Market Edge
Traditional IRA Rules
Eligibility
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You must earn income, but there are no income limits
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Contributions
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May be tax-deductible
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Maximum Contributions
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2021 and 2022 Up to age 50: $6,000 Over age 50: $7,000 Non-income-earning spouse: $6,000 (into a separate IRA) |
Earnings
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Grow tax-deferred until withdrawn, typically in retirement
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Distributions
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Penalty-free and taxed as ordinary income when taken after age 59 1/2
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Required Minimum Distributions
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If you turned 70 1/2 prior to January 1, 2020: Required April 1 of the year following the year you turn 70 1/2 and by December 31st every year thereafter If you turned 70 1/2 after January 1, 2020: Required April 1 of the year following the year you turn 72 and by December 31st every year thereafter |
Early Withdrawals
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Before age 59 1/2 are subject to a 10% penalty in addition to any ordinary income tax that may be due
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Roth IRA vs. Traditional IRA
Need help deciding between a Roth IRA and a Traditional IRA? Try our IRA Selection Tool or view a comparison chart to find out which IRA is right for you.
Considering a Roth IRA conversion
Take advantage of every savings strategy you can. A Roth conversion may help you do that.
Keep your old 401k working for you
You have choices when it comes to managing your old 401k retirement assets. Learn more.