What is a Traditional IRA Account?A traditional IRA is a retirement savings account that may be established by any domestic individual who pays income tax. Contributions to the IRA account may be tax-deductible, and withdrawals are taxed. Distributions may be taken without penalty once the account holder reaches the age of 59 ½, and required distributions must begin by April 1st of the year following the year in which the account holder turns 70 ½ years of age. If money is withdrawn from the account prior to the age of 59 ½, a penalty fee will be assessed.
Annual deposits of up to $5,500 may be contributed to the IRA. Individuals over the age of 50 are allowed to contribute an additional $1,000 annually.
If the individual has a spouse who does not earn any income, an additional $5,500 may be placed into a separate account on behalf of the spouse.
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