{"id":2658,"date":"2014-01-16T06:15:55","date_gmt":"2014-01-16T14:15:55","guid":{"rendered":"http:\/\/staging-prblog.paladinregistry.com\/blog\/?p=2658"},"modified":"2019-06-25T02:16:43","modified_gmt":"2019-06-25T06:16:43","slug":"advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira","status":"publish","type":"post","link":"https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/","title":{"rendered":"Advantages of a Traditional IRA &#8211; Disadvantages of a Traditional IRA"},"content":{"rendered":"\n<p><b>Traditional IRAs<\/b> are a great investment vehicle for retirement for those who qualify to contribute to them (there are some limitations), and they have some interesting features that can make them very advantageous.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Advantages Of Traditional IRA<\/h2>\n\n\n\n<p>Here are some of the benefits of a <a href=\"http:\/\/www.paladinregistry.com\/terms\/ira-individual-retirement-account?query=IRA\" target=\"_blank\" rel=\"noopener noreferrer\"><b>Traditional IRA<\/b><\/a>:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Anyone can contribute, as long as they have earned income; however, you cannot contribute more money to a <b>Traditional IRA<\/b> than what you have in yearly earned income (ex:&nbsp; if you only made $4,000 for a year, you can ONLY contribute up to $4,000 in your <b>Traditional IRA<\/b> for that particular year)<\/li><li>For 2013 and 2014 the annual contribution limit&nbsp;is $5,500 ($6,500 if you\u2019re over age 50), and you have the freedom to invest in any type of investment you are comfortable with (stocks, mutual funds, ETFs, bonds, CDs, annuities, etc.)<\/li><li>Your money grows TAX-DEFERRED&nbsp;(and contributions are tax-deductible) so no matter what your tax bracket is in retirement (past age 59 \u00bd), your distributions will be taxed at that current rate (hopefully a lower rate than during your working years)<\/li><li>You have until April 15<sup>th<\/sup> of the following year to make a yearly contribution&nbsp;(ex:&nbsp; you have until April 15<sup>th<\/sup>, 2014 to contribute to your <b>Traditional IRA<\/b> for 2013), allowing 15 \u00bd months to fill your <b>Traditional IRA<\/b> up each year<\/li><li>You can make non-deductible contributions&nbsp;and those contributions should never be taxed&nbsp; once withdrawn (must keep track of non-deductible contributions carefully)<\/li><li><b>Traditional IRA<\/b> rules allow you to withdraw your money out early (before age 59 \u00bd) at any time BUT there is a 10% penalty for doing so (there are also several exceptions where the IRS will waive the 10% early withdrawal penalty)<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Disadvantages Of <b>Traditional IRAs<\/b> <\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li>You have to begin taking <a rel=\"noopener noreferrer\" href=\"http:\/\/www.paladinregistry.com\/terms\/required-minimum-distributions-rmd-s?query=RMD\" target=\"_blank\">Required Minimum Distributions (RMDs)<\/a>&nbsp;by Apr. 1<sup>st<\/sup> of the current year once you pass the age of 70 \u00bd (you are NOT required to take RMDs from a Roth IRA)<\/li><li>If you do NOT withdraw your RMD amount, you face very stiff penalties from the IRS (at least 50% of your RMD for starters)<\/li><li>If you are already covered by a retirement plan at work and depending on your tax filing status and income your <b>Traditional IRA<\/b> contributions may not be tax-deductible, or only partially deductible<\/li><li>There are certain types of investments you cannot make, such as life insurance contracts, antiques, collectibles, and most precious metal coins (there are a few types of coins that are exceptions to this rule)<\/li><li>You need to have a crystal ball to determine whether tax rates will be higher, lower, or the same as in the future when you retire, which will determine the true effectiveness of Roth IRA compounding investments vs. <b>Traditional IRA<\/b> compounding investments over time (read this last point as \u201cit isn\u2019t easy to figure this out\u201d)<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Conclusion<\/h3>\n\n\n\n<p><a href=\"https:\/\/www.paladinregistry.com\/landing\/find-financial-advisors\">Find an experienced financial advisor<\/a> who deals with <b>Traditional IRAs<\/b> on a regular basis, works for an RIA firm, <a rel=\"noopener noreferrer\" href=\"http:\/\/www.paladinregistry.com\/articles\/why-pay-fees-for-financial-advice\" target=\"_blank\">earns his\/her money from fees (NOT commissions), <\/a>believes in having an abundance of investment choices for clients, and has the heart &amp; demeanor of a teacher, NOT a salesman, and chances are you\u2019ve found the right financial advisor to help you prepare and plan for retirement. To learn more about Martin Federici view his <a rel=\"noopener noreferrer\" href=\"http:\/\/www.paladinregistry.com\/financial-advisor\/dallas-pennsylvania\/Martin.Federici.Jr\" target=\"_blank\">Paladin Registry profile<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Traditional IRAs are a great investment vehicle for retirement for those who qualify to contribute to them (there are some limitations), and they have some interesting features that can make them very advantageous. Advantages Of Traditional IRA Here are some of the benefits of a Traditional IRA: Anyone can contribute, as long as they have earned income; however, you cannot contribute more money to a Traditional IRA than what you<\/p>\n","protected":false},"author":12,"featured_media":2664,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[117],"tags":[],"class_list":["post-2658","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-retirement"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Traditional IRA: Eligibilty, Advantages &amp; Disadvantages<\/title>\n<meta name=\"description\" content=\"Traditional IRAs are a great investment options. Here is all you need to know about the meaning of traditional IRA eligibilty, advantages &amp; disadvantages.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Traditional IRA: Eligibilty, Advantages &amp; Disadvantages\" \/>\n<meta property=\"og:description\" content=\"Traditional IRAs are a great investment options. Here is all you need to know about the meaning of traditional IRA eligibilty, advantages &amp; disadvantages.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/\" \/>\n<meta property=\"og:site_name\" content=\"Paladin Registry Blog\" \/>\n<meta property=\"article:author\" content=\"https:\/\/www.facebook.com\/marty.federici\" \/>\n<meta property=\"article:published_time\" content=\"2014-01-16T14:15:55+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-06-25T06:16:43+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2014\/01\/traditional-ira.png\" \/>\n\t<meta property=\"og:image:width\" content=\"290\" \/>\n\t<meta property=\"og:image:height\" content=\"174\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Martin Federici, Jr.\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@mfadvisers\" \/>\n<meta name=\"twitter:site\" content=\"@PaladinRegistry\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Martin Federici, Jr.\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/\",\"url\":\"https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/\",\"name\":\"Traditional IRA: Eligibilty, Advantages & Disadvantages\",\"isPartOf\":{\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2014\/01\/traditional-ira.png\",\"datePublished\":\"2014-01-16T14:15:55+00:00\",\"dateModified\":\"2019-06-25T06:16:43+00:00\",\"author\":{\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/#\/schema\/person\/cb07bbd1f4f1e3dda452fe9bc8abe85e\"},\"description\":\"Traditional IRAs are a great investment options. Here is all you need to know about the meaning of traditional IRA eligibilty, advantages & disadvantages.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/#primaryimage\",\"url\":\"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2014\/01\/traditional-ira.png\",\"contentUrl\":\"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2014\/01\/traditional-ira.png\",\"width\":290,\"height\":174,\"caption\":\"traditional ira\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.paladinregistry.com\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Retirement\",\"item\":\"https:\/\/www.paladinregistry.com\/blog\/category\/retirement\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Advantages of a Traditional IRA &#8211; Disadvantages of a Traditional IRA\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/#website\",\"url\":\"https:\/\/www.paladinregistry.com\/blog\/\",\"name\":\"Paladin Registry Blog\",\"description\":\"Helping You Make Better Financial Decisions\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.paladinregistry.com\/blog\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/#\/schema\/person\/cb07bbd1f4f1e3dda452fe9bc8abe85e\",\"name\":\"Martin Federici, Jr.\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2017\/05\/martin-federici-bio-pic-96x96.png\",\"contentUrl\":\"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2017\/05\/martin-federici-bio-pic-96x96.png\",\"caption\":\"Martin Federici, Jr.\"},\"description\":\"Martin Federici is happily married to his beautiful wife since 1999, have 3 young active children, is an avid sports enthusiast (especially basketball), healthy eater, regular exerciser, CEO of 2 practices with a fantastic friend and business partner, practicing financial advisor\/planner since 2005, and loves his clients - life is good!\",\"sameAs\":[\"http:\/\/www.mfadvisers.com\",\"https:\/\/www.facebook.com\/marty.federici\",\"http:\/\/www.linkedin.com\/in\/martinfederici\",\"https:\/\/x.com\/mfadvisers\"],\"url\":\"https:\/\/www.paladinregistry.com\/blog\/author\/martin-federici\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Traditional IRA: Eligibilty, Advantages & Disadvantages","description":"Traditional IRAs are a great investment options. Here is all you need to know about the meaning of traditional IRA eligibilty, advantages & disadvantages.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/","og_locale":"en_US","og_type":"article","og_title":"Traditional IRA: Eligibilty, Advantages & Disadvantages","og_description":"Traditional IRAs are a great investment options. Here is all you need to know about the meaning of traditional IRA eligibilty, advantages & disadvantages.","og_url":"https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/","og_site_name":"Paladin Registry Blog","article_author":"https:\/\/www.facebook.com\/marty.federici","article_published_time":"2014-01-16T14:15:55+00:00","article_modified_time":"2019-06-25T06:16:43+00:00","og_image":[{"width":290,"height":174,"url":"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2014\/01\/traditional-ira.png","type":"image\/png"}],"author":"Martin Federici, Jr.","twitter_card":"summary_large_image","twitter_creator":"@mfadvisers","twitter_site":"@PaladinRegistry","twitter_misc":{"Written by":"Martin Federici, Jr.","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/","url":"https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/","name":"Traditional IRA: Eligibilty, Advantages & Disadvantages","isPartOf":{"@id":"https:\/\/www.paladinregistry.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/#primaryimage"},"image":{"@id":"https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/#primaryimage"},"thumbnailUrl":"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2014\/01\/traditional-ira.png","datePublished":"2014-01-16T14:15:55+00:00","dateModified":"2019-06-25T06:16:43+00:00","author":{"@id":"https:\/\/www.paladinregistry.com\/blog\/#\/schema\/person\/cb07bbd1f4f1e3dda452fe9bc8abe85e"},"description":"Traditional IRAs are a great investment options. Here is all you need to know about the meaning of traditional IRA eligibilty, advantages & disadvantages.","breadcrumb":{"@id":"https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/#primaryimage","url":"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2014\/01\/traditional-ira.png","contentUrl":"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2014\/01\/traditional-ira.png","width":290,"height":174,"caption":"traditional ira"},{"@type":"BreadcrumbList","@id":"https:\/\/www.paladinregistry.com\/blog\/retirement\/advantages-of-a-traditional-ira-disadvantages-of-a-traditional-ira\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.paladinregistry.com\/blog\/"},{"@type":"ListItem","position":2,"name":"Retirement","item":"https:\/\/www.paladinregistry.com\/blog\/category\/retirement\/"},{"@type":"ListItem","position":3,"name":"Advantages of a Traditional IRA &#8211; Disadvantages of a Traditional IRA"}]},{"@type":"WebSite","@id":"https:\/\/www.paladinregistry.com\/blog\/#website","url":"https:\/\/www.paladinregistry.com\/blog\/","name":"Paladin Registry Blog","description":"Helping You Make Better Financial Decisions","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.paladinregistry.com\/blog\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.paladinregistry.com\/blog\/#\/schema\/person\/cb07bbd1f4f1e3dda452fe9bc8abe85e","name":"Martin Federici, Jr.","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.paladinregistry.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2017\/05\/martin-federici-bio-pic-96x96.png","contentUrl":"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2017\/05\/martin-federici-bio-pic-96x96.png","caption":"Martin Federici, Jr."},"description":"Martin Federici is happily married to his beautiful wife since 1999, have 3 young active children, is an avid sports enthusiast (especially basketball), healthy eater, regular exerciser, CEO of 2 practices with a fantastic friend and business partner, practicing financial advisor\/planner since 2005, and loves his clients - life is good!","sameAs":["http:\/\/www.mfadvisers.com","https:\/\/www.facebook.com\/marty.federici","http:\/\/www.linkedin.com\/in\/martinfederici","https:\/\/x.com\/mfadvisers"],"url":"https:\/\/www.paladinregistry.com\/blog\/author\/martin-federici\/"}]}},"_links":{"self":[{"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/posts\/2658"}],"collection":[{"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/comments?post=2658"}],"version-history":[{"count":21,"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/posts\/2658\/revisions"}],"predecessor-version":[{"id":9489,"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/posts\/2658\/revisions\/9489"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/media\/2664"}],"wp:attachment":[{"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/media?parent=2658"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/categories?post=2658"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/tags?post=2658"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}