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Traditional IRA
The advantages of a traditional IRA are fewer than those of a Roth IRA.
The traditional IRA may be right for you if:
- You want tax-deductible contributions to lower taxes and save money immediately
- Your modified adjusted gross income (MAGI) is above $110,000 ($160,000 for married filing jointly)
- You and your spouse do not participate in an employer-sponsored retirement plan
Features
- Must contribute earned income
- Maximim tax-deferred contribution of $2,000 by qualified individuals not covered by an employer-sponsored retirement plan
- Contributions are tax-deductible
- You pay taxes on the contribution as ordinary income when you withdraw funds in retirement
- Mandatory distribution at age 70½
- Penalty-free distribution after 5 years for first home purchase or non-qualified educational expenses
Account disclosure (PDF)
