TD Ameritrade

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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 Investment earnings can also grow tax-deferred until withdrawn, typically at retirement.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
EligibilityYou must earn income, but there are no income limits.
ContributionsMay be tax deductible
Maximum Contributions
2020 and 2021
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EarningsGrow tax-deferred until withdrawn, typically at retirement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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AdChoices

Before investing in an ETF or mutual fund, be sure to carefully consider the fund's objectives, risks, charges, and expenses. For a prospectus containing this and other important information, please contact us. Please read the prospectus carefully before investing.

1No-Transaction-Fee (NTF) mutual funds are no-load mutual funds for which TD Ameritrade does not charge a transaction fee. NTFs, as well as other funds, have other continuing fees and expenses described in the fund’s prospectus. TD Ameritrade receives remuneration from fund companies for record-keeping, shareholder and other administrative services. The amount of remuneration is based in part on the amount of investments in such funds by TD Ameritrade clients. Almost all funds held 180 days or less will be subject to a short-term redemption fee of $49.99. This fee is in addition to any applicable transaction fees or fees described in the fund's prospectus.

Taxes related to TD Ameritrade offers are your responsibility. All Promotional items and cash received during the calendar year will be included on your consolidated Form 1099. Please consult a legal or tax advisor for the most recent changes to the U.S. tax code and for rollover eligibility rules.

Market volatility, volume and system availability may delay account access and trade executions.

The 15 minute time frame to open an IRA applies to normal situations and may not reflect the time needed for all users to read all disclosure documents, which should be done. Account funding must be completed in order for trading to begin.

TD Ameritrade does not provide tax advice. We suggest that you seek the advice of a tax-planning professional with regard to your personal circumstances.

TD Ameritrade is not responsible for third-party information or services. Names and logos displayed are the property of their respective owners.

All investments involve risks, including the loss of principal invested. Past performance of a security does not guarantee future results or success.

There is no assurance that the investment process will consistently lead to successful investing. Asset allocation and diversification do not eliminate the risk of experiencing investment losses.

Mutual funds are subject to market, exchange rate, political, credit, interest rate and prepayment risks, which vary depending on the type of mutual fund.

ETFs can entail risks similar to direct stock ownership, including market, sector, or industry risks.  ETF trading prices may not reflect the net asset value of the underlying securities. Commission fees typically apply.

Before deciding whether to retain assets in a 401(k) or roll over to an IRA an investor should consider various factors including, but not limited to, investment options, fees and expenses, services, withdrawal penalties, protection from creditors and legal judgments, required minimum distributions and possession of employer stock. View the FINRA Investor Alert for additional information. You may roll over assets from a former employer's retirement plan to an existing Traditional IRA or open a new, separate Rollover IRA. The assets you roll over to an existing Traditional IRA can later be moved into an employer-sponsored plan. However, the after-tax (non-deductible) contributions you make to your Traditional IRA cannot be rolled over to an employer-sponsored plan. Always consult a tax advisor to learn how a financial decision will impact your individual retirement planning.

This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.

TD Ameritrade, Inc., member FINRA/SIPC, a subsidiary of The Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. ©2021 Charles Schwab & Co. Inc. All rights reserved.