The Traditional IRA is the most common type of Individual Retirement Arrangement (IRA). Why? Well, it is probably because most people rollover their employer’s pre-tax retirement account into a Traditional IRA. The Traditional IRA offers the advantage of providing a tax deduction for those who qualify. As a result, it is very appealing to those wanting to pay themselves instead of the IRS.
A Traditional IRA is a type of individual retirement account in which you can make pre-tax contributions. The investments in the account grow tax-deferred. Then, you pay income tax on withdrawals at your regular tax rate. Withdrawals taken before reaching the age of 59.5 are subject to an early-withdrawal penalty.
The Rules
Publication 590-A and Publication 590-B explain the details of IRAs including:
- Setting up an IRA
- Contributing to an IRA
- Transferring money or property to and from an IRA
- Handling an inherited IRA
- Receiving distributions (making withdrawals) from an IRA
- Taking a credit for contributions to an IRA
- A comparison of traditional and Roth IRAs
Traditional IRAs (like Roth IRAs) have a contribution limit for 2021 of $6,000 if you are under 50 and $7,000 of your age is 50 or over.
To decide if a Traditional IRA is right for you, ask your competent tax advisor. When you are ready to move forward and open an account contact us at uDirect IRA Services Toll-Free at (866) 447-6598 or by email at info@uDirectIRA.com
To open an account, we need:
1) Application (Click Here)
2) Copy of your driver’s license or passport
3) Check for $50 for the set-up fee (made payable to uDirect IRA Services) or pay on PayPal
4) Copy of the statement from your current IRA or other retirement account.
5) W-9 form HERE
6) Provide a username for your online account. This cannot be your email address.
