TD Ameritrade

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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 Investment earnings can also grow tax-deferred until withdrawn, typically at retirement.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.

Open a Traditional IRA

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

Eligibility2019: To participate, you must be under age 70½ by the end of the calendar year. You must earn income, but there are no income limits.
2020: You must earn income, but there are no income limits.

ContributionsMay be tax deductible
Maximum Contributions
2019
Up to age 50:  $6,000
Age 50-70½:  $7,000
Over age 70½:  Not allowed
Non-income-earning spouse:  $6,000 (into a separate IRA)

2020
Up to age 50:  $6,000
Over age 50:  $7,000
Non-income-earning spouse:  $6,000 (into a separate IRA)
EarningsGrow tax-deferred until withdrawn, typically at retirement
DistributionsPenalty-free and taxed as ordinary income when taken after age 59½
Required Minimum DistributionsIf you turned 70½ prior to January 1, 2020: Required April 1 of the year following the year you turn 70½ and by December 31st every year thereafter

If you turned 70½ after January 1, 2020: Required April 1 of the year following the year you turn 72 and by December 31st every year thereafter
Early WithdrawalsBefore age 59½ are subject to a 10% penalty in addition to any ordinary income tax that may be due

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.

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