What is a Traditional IRA?

A Traditional IRA is an Individual Retirement Account which allows individuals to save for retirement. The name Traditional IRA is used to identify how it will be treated by the IRS.

When an individual opens a Traditional IRA they can then place investments in this account, or use a service like jazzWealth to manage the investments for them. The investments can include stocks, bonds, exchange traded funds, and mutual funds among other investments. The investments grow "tax deferred" until retirement. This means that none of the gains or contributions are taxed until an individual begins to withdraw their money in retirement.

Advantages

  • Investments grow tax-free until retirement
  • Contributions may be tax-deductible in the year of contribution
  • Wide variety of investment options
  • Protection from creditors

Disadvantages

  • Taxes in retirement could be a burden if one expects to be in a higher tax bracket
  • Tax rates in the future are uncertain
  • A full tax deduction may not be allowed if current income is above limits
  • Investors are limited by the contribution cap

Why choose jazzWealth for your Traditional IRA?

  • Do not understand the investment process
  • Do not have time to manage one's investments
  • Need personal financial advice along the way
  • No trading commissions or fund fees

When it comes time to withdraw money, you'll generally owe federal income taxes — and likely state and local taxes — on your investment earnings, as well as on the contributions you deducted. If you are under 59½ and don't qualify for any of the exceptions to the early withdrawal rules, your withdrawal will be considered a premature distribution and may be subject to an additional 10% federal tax on top of regular income taxes.


We suggest speaking with a tax professional about your specific situation prior to making a decision. Steward Partners, its affiliates, and Jazz Wealth do not provide tax or legal advice.

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