Episode 1302
Join us for a deep dive into the Traditional IRA, a foundational retirement vehicle established by the Employee Retirement Income Security Act of 1974. Once described as "the biggest tax break in history," this account allows eligible individuals to make tax-deductible contributions and grow their investments without being taxed on transactions or profits until withdrawal.
In this episode, we cover:
• Tax Mechanics: How Traditional IRAs differ from Roth IRAs, specifically comparing pre-tax contributions against the tax-free withdrawals of a Roth.
• Contribution Limits & Eligibility: We break down annual contribution caps—such as the $6,000 limit for 2019–2021—and explain how income levels affect your ability to deduct contributions if you also have a workplace retirement plan.
• Withdrawal Rules: Learn about the 10% penalty for early withdrawals before age 59½, the specific exceptions for home purchases or education, and the strict "Required Minimum Distributions" that must begin by age 72.
• Strategic Moves: Discover how converting a Traditional IRA to a Roth acts as a financial option to hedge against future tax uncertainty, and understand the critical difference between a "transfer" and a "rollover" to avoid tax pitfalls.
Whether you are looking to defer taxes today or plan for mandatory distributions later, tune in to understand the risks and rewards of the Traditional IRA.
Published on 1 day, 1 hour ago
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