TD Ameritrade

Traditional IRA

Is a Traditional IRA right for you?

A Traditional IRA is an individual retirement account that may provide tax benefits because contibutions may be tax deductible. Investment earnings can also grow tax-deferred until withdrawn, typically at retirement. You may contribute up to $5,500 of earned income ($6,500 if you are age 50 or older) until you are 70½ years old. At this time, you must begin taking an annual Required Minimum Distribution (RMD). 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.
    • A Traditional IRA is available to everyone who earns income under the age of 70½.
    • After age 70½, you can rollover or transfer funds from another IRA into a Traditional IRA.

Why open a TD Ameritrade Traditional IRA?

  • Breadth of Investment Choices - Including 100+ commission-free ETFs1, no-transaction-fee mutual funds2, 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 Planner.
  • 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

Eligibility

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.

Contributions

May be tax deductible

Maximum Contributions

Up to age 50: $5,500
Age 50-70½: $6,500
Non-income-earning spouse: $5,500 (into a separate IRA)

Earnings

Grow tax-deferred until withdrawn, typically at retirement

 

Distributions

Penalty-free and taxed as ordinary income when taken after age 59½

Required Minimum Distributions

Required April 1 of the year following the year you turn 70½ and by December 31st every year thereafter

Early Withdrawals

Before age 59½ are subject to a 10% penalty in addition to any ordinary income tax that may be due

Open an IRA in just 15 minutes
+ get up to $600*See details

Open an account

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.

Check the background of TD Ameritrade on FINRA's BrokerCheck