What makes a traditional IRA different from other types of IRAS?

What makes a traditional IRA different from other types of IRAs is that owners receive a tax benefit when making contributions. For example, if your income is $60,000 and you contribute $6,000 to a traditional IRA, your taxable income for that year will drop to $54,000 if you qualify for the tax deduction (more on that below).

What is a traditional IRA & how does it work?

All while possibly lowering your current income taxes. What is a traditional IRA? A traditional IRA is an individual retirement account (IRA) designed to help people save for retirement, with taxes deferred on any potential investment growth.

Are specialized IRA accounts better than traditional IRAs?

Certain online brokerages offer specialized IRAs, including: Roth and traditional IRAs are two of the best IRA accounts for growing your nest egg. However, they have key differences. One may be better for you depending on your preferred tax benefit, annual income, and personal preferences.