Module 1 explores "Traditional IRAs". Links to other modules can be found above, while links to pages within this module are shown at the left.
Traditional IRAs -- the first type initially established by Congress in 1982 -- allow individuals with earned income to contribute annually to a retirement account. The earnings in the account grow tax-deferred, and are generally taxed when withdrawn by the account holder. Initially, all contributions to traditional IRAs were tax-deductible. Since 1987, the question of deductibility has been based on whether the account holder is covered by another "qualified" retirement plan and the account holder's income level. Regardless of whether the contribution can be deducted, all workers under age 70½ make make contributions to their traditional IRAs. Withdrawals from traditional IRAs are subject to various restrictions.