Traditional IRA
A retirement account where contributions may be tax-deductible now and withdrawals are taxed later.
A traditional IRA lets you contribute money that may be deductible today, depending on your income and whether you're covered by a workplace plan. The money grows tax-deferred, and you pay ordinary income tax when you withdraw it in retirement. Required minimum distributions begin at the age set by current law.
The traditional-versus-Roth choice comes down to whether you expect your tax rate to be higher now or in retirement. Deduct now and pay later (traditional) tends to favor those in high brackets today; pay now and withdraw free (Roth) favors those expecting higher rates later or wanting tax-free flexibility. Many people hold both for diversification.
This definition is general information to help you understand a term, not financial, tax, or legal advice. Figures that change year to year (limits, thresholds, rates) should be confirmed against current official sources. For guidance on your situation, a licensed fee-only fiduciary is the right next step.