With a Traditional IRA, your yearly contribution may qualify as a tax deduction when you file your Income Taxes. If you qualify, your Adjusted Income will be lowered and you may pay fewer taxes.

Money can be withdrawn from the account without an early penalty fee provided you are age 59 ½ or older. Any money withdrawn will be considered income and you will be taxed on it. At age 70 ½, you are required by law to start withdrawing money.

Unlike a savings account, the interest that is compounded will not be counted as income until you withdraw the money.

Visit the IRS’s website for current information to see if you qualify for the Tax Deduction.