2018 Traditional IRA Facts:
- Contribution limit for ages 49 and under: $5,500
- Contribution limit for ages 50 and older: $6,500
- This includes the $1,000 catch-up contribution
- This applies to anyone who turns age 50 in 2018, even if you turn age 50 on 12/31/2018
- Traditional IRA contributions are tax-deferred (usually, see below)
- This means you don't pay taxes on your contributions or growth until you start withdrawing in retirement
- You can contribute to a Traditional IRA regardless of your annual income, however you might not receive the tax deduction if you or your spouse is eligible for a work sponsored retirement plan like a 401k
- Single filers can generally deduct some of the contributions if you make less than $73,000/year
- Married filers filling jointly can generally deduct some of the contributions if you make less than $199,000/year
- If you don't have access to a employee sponsored retirement plan, you should be able to deduct the full $5,500 on your taxes regardless of income level
- Penalty-free withdrawals start at age 59 1/2
- Early withdrawals have a 10% penalty
- Required minimum distributions start at age 70 1/2