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Traditional IRA

Is a Traditional IRA right for you?

A Traditional IRA is an individual retirement account that may provide tax benefits because contributions may be tax deductible. Investment earnings can also grow tax-deferred until withdrawn, typically at retirement. You may contribute up to $6,000 of earned income ($7,000 if you are age 50 or older), but bear in mind that you must begin taking an annual Required Minimum Distribution (RMD) at age 72 (or 70½ if you turned 70½ prior to January 1, 2020). Withdrawals are penalty-free and taxed as ordinary income when taken after age 59½. If you are in a higher tax bracket today than you will be during retirement, a Traditional IRA may be a smart choice.

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


  • 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.

Traditional IRA Rules

Eligibility
You must earn income, but there are no income limits
Contributions
May be tax-deductible
Maximum Contributions

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
Grow tax-deferred until withdrawn, typically in retirement
Distributions
Penalty-free and taxed as ordinary income when taken after age 59 1/2
Required Minimum Distributions

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
Before age 59 1/2 are subject to a 10% penalty in addition to any ordinary income tax that may be due

Get in touch Call or visit a branch

Call us: 800-454-9272

175+ Branches Nationwide

Check the background of TD Ameritrade on FINRA's BrokerCheck