◈ GLOSSARY · RETIREMENT
Traditional IRA.
A definition, in plain English — with the books that teach it.
Reviewed by ClearValue Editorial Team · Jun 27, 2026
◈ DEFINITION
What it means
Definition
An individual retirement account funded with pre-tax dollars (deduction may phase out if you or a spouse have a workplace plan), where growth is tax-deferred and withdrawals in retirement are taxed as ordinary income. Same $7,000 / $8,000 catch-up limits as a Roth. Required minimum distributions kick in at age 73 — the IRS eventually wants its tax revenue.
◈ IN PRACTICE
Example
A $7,000 deductible contribution in the 24% federal bracket lowers this year's tax bill by $1,680 — but every dollar withdrawn at 70 is taxed at whatever your bracket is then.