Retirement & Savings

What Is a Traditional IRA?

A traditional IRA is a US individual retirement account in which contributions may be tax-deductible and investments grow tax-deferred. Withdrawals in retirement are taxed as ordinary income. Whether contributions are deductible can depend on income and on whether the owner is covered by a workplace retirement plan.

How It Works

Contributions may reduce taxable income in the year they are made. Earnings are not taxed while they stay in the account. Withdrawals are taxed as income, and those before age 59½ may also face a 10% additional tax unless an exception applies.

Required Minimum Distributions

Traditional IRAs are subject to required minimum distributions beginning at an age set by law, meaning the owner must withdraw a minimum amount each year.

🧮 Calculate It Yourself

Put Traditional IRA into practice with these free calculators — no sign-up, nothing stored.

🏛️ Roth vs. Traditional IRA Calculator Compare the after-tax retirement value of both account types. Calculate → 🏦 401(k) Calculator Estimate your retirement savings using real 2026 IRS contribution limits. Calculate →

🔗 Related Terms

Roth IRA 401(k) Plan Taxable Income Health Savings Account (HSA)

More Retirement & Savings Terms

📖 Browse all glossary terms or explore all free calculators.

Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.