What is a Traditional IRA?

Traditional IRAs are tax-deferred retirement savings vehicles for individual investors. Anyone under the age of 70½ who has earned income (or the non-working spouse of such an individual) can make a Traditional IRA contribution. The only question is whether or not the contribution can be deducted. This hinges on whether the individual is an active participant in an employer-sponsored retirement plan or not. A Legend Group Financial Professional can help you determine whether you (or your non-working spouse) are eligible to deduct a Traditional IRA contribution. If you cannot deduct a contribution, it may make more sense to contribute to a Roth IRA if your adjusted gross income (AGI) is within the Roth eligibility limits.

What do Traditional IRA accounts provide?

Pre-tax Savings – Traditional IRA account contributions are tax deductible for eligible investors.

Tax-deferred Growth Potential – Taxes on IRA investment earnings are deferred, meaning you need not pay taxes on anything that your IRA earns until you retire or take a distribution. For many people, that time is years away, allowing for long-term investment growth. Withdrawals are taxed as ordinary income in the year distributed, which means that a traditional IRA may work best if your tax rate is higher today than you expect it to be in the future.

Distributions – IRA assets can be withdrawn without penalty after age 59½.1 Upon withdrawal, ordinary income taxes will apply. Distributions must begin no later than April 1 of the calendar year following the calendar year in which you attain age 70½.

Many Investment Options – A wide variety of investment options are available, including fixed and variable annuities and mutual funds.

Professional Investment Management – Legend IRA accountholders have the opportunity to participate in Legend Advisory's Portfolio Management. These programs offer diversified2 asset allocation portfolios that are managed by a team of investment professionals who monitor world markets in an effort to maximize returns while attempting to reduce risk.

1Distributions from a traditional retirement account are subject to ordinary income taxes in the year distributed. Distributions prior to age 59½ may incur an additional 10% penalty.

2Diversification does not assure a profit or protect against market loss.

Lincoln Investment and its affiliates do not provide tax information or advice. 

Before investing in a mutual fund or variable annuity, consider its investment objectives, risks, charges and expenses carefully. The prospectus for a mutual fund or the policy prospectus and prospectuses for the underlying investments of a variable annuity, which contain this and other information, can be obtained by contacting Lincoln Investment. Please read the prospectus or prospectuses carefully before you invest or send money. 

Do you have a question? Are you looking for more information?

We have answers. Our Financial Professionals have the skills, knowledge and experience to guide you in crafting and implementing an effective plan designed to reflect your unique investment and retirement goals – or simply answer any questions you may have. Let one of our Financial Professionals walk you through the process every step of the way and review which options are best suited for you to help you feel more secure and worry a little less.