Traditional IRA
An individual retirement account funded with pre-tax dollars; you pay tax when you withdraw.
Contributions may be tax-deductible, depending on your income and whether you (or your spouse) are covered by a workplace retirement plan. The 2024 limit is the same as the Roth: $7,000, or $8,000 if 50+. Deductibility phases out at moderate incomes if you have a 401(k) at work. The IRS requires Required Minimum Distributions (RMDs) starting at age 73 under SECURE 2.0. Early withdrawals before 59 1/2 generally face a 10% penalty plus ordinary income tax.
Inside Finlo
A 60-second lesson that puts this term in context, alongside the others, lives inside the Finlo app.