Traditional IRAs are tax-deferred—meaning you’ll pay taxes when you withdraw funds during retirement, rather than before you invest in the IRA

Learn about the differences between traditional and Roth IRAs

Traditional IRAs allow tax-deductible contributions, but withdrawals in retirement are taxed as income. Roth IRAs use after-tax dollars, offering tax-free withdrawals later, but income limits may restrict eligibility. Choosing between the two depends on your financial situation today and your future tax outlook.

Although anyone can contribute to a traditional IRA, not everyone can access its tax deductions

If you or your spouse contributes to a 401(k), you likely won’t be able to deduct your traditional IRA contributions from your taxes. On the flip side, if you don’t contribute to an employer-sponsored retirement account, you’re probably eligible for that tax deduction.

Roth 401(k) plans vs regular 401(k) plans

A normal 401(k) defers tax payments to later, while a Roth requires no tax payments at withdrawal time. Financial experts often recommend investing in a Roth 401(k) plan or Roth IRA when someone first starts their career to lock in a relatively low tax rate.

An individual retirement account is a type of tax-advantaged investment account

An IRA lets individuals at most income levels invest either pre- or post-tax money for retirement. IRAs are often good solutions for people who don’t have the option to invest in a 401(k) plan—or for those who want to put even more money aside for retirement.

There are four main types of IRAs to choose from

Those types are traditional, Roth, SEP, and SIMPLE. While all IRAs can help you save for retirement, each type has its own tax advantages and eligibility requirements, such as employment type or income level.

Explore the key differences between 401(k) plans and IRAs

A 401(k) is employer-sponsored, may include matching contributions, and allows higher annual contributions (up to $23,000). An IRA is self-managed, offers greater control over investments, and has lower contribution limits ($7,000). Both plans come in traditional and Roth options, but income caps may limit IRA choices, while 401(k)s have no such restrictions.

529s vs. Roth IRA

Roth IRAs and 529 plans both offer tax advantages, but they serve different goals. 529s are state-run accounts meant for education, offering tax-free growth and withdrawals for qualified expenses. Roth IRAs are built for retirement, but can also be tapped for education, with more investment flexibility and fewer contribution limits.

Backdoor Roth IRAs are loopholes used to access the tax advantages of a Roth IRA for individuals who otherwise make too much money to qualify for one

Backdoor IRAs work by investing money into a traditional IRA, and then converting that traditional IRA to a Roth IRA.

Roth IRAs were first introduced in the Taxpayer Relief Act of 1997

The Roth IRA is one of the most popular retirement accounts in the US. Nearly a quarter of Americans contributed to a Roth IRA in 2023. But this type of financial account hasn’t been around for that long.

In most cases, if you withdraw your money from an IRA before you turn 59½ years old, you'll face a hefty 10% penalty

However, there are a few exceptions to this rule. In the case of adoption, death, terminal illness, education, homebuying, and more, you can access your funds without a strike against you. A chart outlines the different exceptions to this rule, plus the accounts to which they apply.

What's a rollover IRA?

A rollover IRA is a type of investment account that lets you move the money from an old retirement account into an IRA after you stop working for your employer. This move lets you keep your funds in a tax-deferred account without being hit with taxes, fees, or penalties. This article explains how you can roll over your money and highlights any restrictions to keep in mind. Learn more here.

Annuitants have to pay income taxes on the annuity payments they receive, unless their annuities are folded into a Roth IRA

In most other cases, annuities grow tax-deferred until annuitants start to receive payments. Those payments are then taxed as regular income. Nonqualified annuities, which are bought with after-tax dollars, have different rules.

Having two retirement accounts has its pros and cons

Contributing to both an IRA and a 401(k) lets you increase your retirement savings by about 30% every year. However, you’ll also spend more time actively investing that money and pay more in fees.

You have to earn under a certain gross amount per year to be eligible for a Roth IRA

A Roth IRA might make the most sense for someone confident that they will have a higher income in retirement than they do now. For 2025, those allowed to contribute to a Roth IRA must have a modified adjusted gross income (MAGI) of less than $150K.

A spousal IRA allows a working spouse to contribute to an IRA on behalf of their nonworking partner

This ensures both people can build financial security for the future. While it's not a separate account type, this provision requires couples to file a joint tax return to qualify, helping nonearning spouses save for retirement independently.

Explore a guide to 529 college savings plans

Investors put after-tax dollars into these education-earmarked accounts, and like a 401(k) or IRA, they invest them into stocks, bonds, or funds. When it comes time to withdraw, investors do not pay any taxes on distributions. However, the money must be used for approved expenses like college tuition, textbooks, and trade schools.

7 things to know about inherited IRA rules

An inherited IRA is any kind of IRA or 401K plan you inherited from someone after they’ve died. Since there are different tax advantages for each type of retirement account, the rules you have to follow widely differ based on the account, your relationship to the deceased, and how you want to use the money. Here are the seven things you must know to navigate an inherited IRA.

Mutual funds and taxes

With mutual funds, you can expect a similar tax experience to that of bonds and stocks, although there are a few key differences. Look out for potential taxes on any capital gains or dividend earnings.

Revocable trusts are typically subject to estate taxes

Irrevocable trusts, however, are not. Both types help beneficiaries avoid probate, the lengthy court process that administers a person’s estate upon death.

Most Americans take the standard tax deduction

A tax deductible is an expense that a taxpayer or business can subtract from adjusted gross income, reducing their taxable income and therefore reducing the amount of taxes owed. Governments often use tax deductibles as a way to reward people who do things that are considered beneficial to society, like charitable donations.

Seven early retirement lessons

After one year of retirement under his belt, financial publication Kiplinger's former editor has learned some lessons. Specifically, in this article, he shares his best early retirement advice, from when it makes sense to convert a traditional IRA to a Roth in early retirement, to how to prepare for retirement from a psychological perspective. Read more here.

In 2021, Social Security began drawing down trust fund reserves to help pay for benefits

The Social Security trust funds are invested solely in US Treasury bonds. Any Social Security tax revenue surplus has historically been invested in these bonds, which are non-marketable securities available only to trust funds. The interest on these investments also contributes to program income.

Financial rules that many FIRE followers live by include guidelines around tax efficiency and more

Many FIRE proponents follow specific financial rules, like the 4% rule, in order to achieve FIRE. They also take steps to create an efficient tax strategy and take advantage of compound interest.

The IRS may look at your social media if you're being audited

While some people cheat on their taxes, others evade paying them altogether. This article details methods the Internal Revenue Service uses to catch these people in the act, such as scanning social media, computer data analysis, and whistleblowers.

People often invest in alternative investments to diversify their portfolios

Because alternatives often have little correlation with traditional investments like stocks and bonds, adding them to a traditional portfolio can reduce its overall risk exposure.

Hedge funds, the private investment firms that trade a wide swath of financial assets, make money by imposing steep fees on investors and from the fund's investment performance.

Calculate how much of your tax dollars go to each federal program based on your income, filing status, and number of children

While the first exchange-traded fund (a 'basket' of different assets that can be bought and sold on a stock exchange) in the US only launched in 1993, the global ETF market has grown to more than $10T in the short time since.

An initial public offering or 'IPO' is the process of a private company becoming public by putting shares of the company on the stock market for purchase.

Iran's Revolutionary Guard Corps is independent of Iran's regular army and is one of the most powerful and influential military-political organizations in the Middle East.

Warren Buffett's former professor Benjamin Graham is known as the 'father of value investing,' a strategy in which investors seek to buy stocks trading below their intrinsic worth.

Doctors differentiate between a phobia and fear by asking patients whether their fear interferes with their day-to-day activities.

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Poison ivy's rash-causing compound is found in the plant's roots, stem, and leaves—so coming into contact with any part of the plant can lead to rashes for the 85% of people who are allergic to it.

Some coin denominations have ridges etched on their sides, partly to prevent counterfeiting, in a practice called 'reeding.'

Some renewable energy sources may weaken the resiliency of electric grids by removing outage buffers provided by coal- and natural gas-fired plants, which provide the system with more time to find a new power source if a plant goes down.

Corals are themselves not coral reefs—the term refers to the tiny marine invertebrates that build the rigid reef.

All rainbows are 'raincircles' caused by water droplets separating white sunlight into a spectrum of colors, but Earth's surface blocks the bottom half of the circle from our line of sight.

Art theft is the third-largest source of criminal revenues worldwide, thanks in part to the subjective nature of valuing a work of art.

Objects can be 3D printed with light by projecting 2D computerized tomography (CT) scans onto rotating cylinders of resin, which solidify upon exposure.

A researcher recently discovered an interview from 1967 between groundbreaking journalist Joan Didion and the Grateful Dead, years before the band became an institution.

Despite being favored by 87% of Americans, Congress does not have term limits.

Fast-casual restaurant Chili's is experiencing a resurgence, with its parent company recently reporting a nearly 32% increase in sales, thanks to passionate Gen Z fans on TikTok.

The first steps to rebuilding your credit score include getting to know exactly what's on your credit report and figuring out how far you are from the '700 club,' or 'good score' range.

Against his wishes, Albert Einstein's brain was removed before his cremation, and the pathologist responsible stored it for decades in mason jars within a beer cooler.

Long before Major League Baseball began allowing instant replay for balls and strikes, an umpire reluctantly used the technology to determine whether a hit was a home run, a move that inadvertently ushered in a new era for the sport.

Researchers believe the brain consolidates memories, processes emotions, and plans for the future during dream states

See this overview of the firework rules across all 50 states, ranging from a complete ban on non-professional fireworks in Massachusetts to states with more lax rules like Indiana.

One of the most famous portraits ever taken is 'Afghan Girl' (1984) by Steve McCurry, yet the subject Sharbat Gula went much of her life without being identified or benefitting from the image's success.

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