What is a Traditional IRA?

A traditional IRA is an Individual Retirement Account which allows you to make contributions to a retirement account and then deduct the amount of your contributions from your income. This type of account provides you with a tax incentive for investing. Neither the contributions in the account nor the earnings are taxed until the money is withdrawn. This is different from a Roth IRA which does not provide a tax deduction for contributing, but rather allows the money and earnings to be withdrawn taxfree at retirement.