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Traditional IRAs is the term used to describe the original concept for an Individual Retirement Account. Traditional IRAs differs from a Roth IRA, or a SIMPLE IRA. Contributions to traditional IRAs may be tax deductible or nondeductible. Earnings are allowed to accrue to these IRA accounts free from income taxes.
You can set up a traditional IRA as long as you have taxable compensation or have not reached age 70 ½ by the end of the calendar year. Contribution limits for a traditional IRA are:
- In 2004, $3,000 or, $3,500 if you are 50 or older.
- In 2005, $4,000 or $4,500, if you are 50 or older
- In 2006, $4,000 or $5,000, if you are 50 or older
Contributions to traditional IRAs are capped at your taxable compensation. Contributions are phased out so take a look at our article on Traditional IRA for more information on deduction phase out limits.
Other forms of this term include -traditional IRA |
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