A traditional Individual Retirement Account (IRA) is a tax-advantaged savings account that is established and funded by an individual to accumulate retirement savings. A traditional IRA is a type of IRA that is generally funded through tax-deductible annual contributions and rollovers of pre-tax assets from other eligible retirement plans, such as 401(k) plans.
A traditional IRA is easy to establish and provides the account owner with flexibility and control over their contributions, investments, and distributions. Annual retirement savings contributions may be tax-deductible and investment earnings generally grow tax-deferred. With a Traditional IRA, you’re investing more upfront than you would with a typical brokerage account, but there are tax benefits.
Traditional IRAs are protected by several government agencies, such as the Securities Investor Protection Corporation (SIPC) and the Federal Deposit Insurance Corporation (FDIC).