SHOULD YOU HAVE A TRADITIONAL IRA?
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Now you know the advantage of IRA deductibility. You should also be able to calculate how much of your IRA contributions are tax-deductible. This information will come in handy if you decide to set up your own IRA, or if you want to change your deductibility option.
If you are currently in a high tax bracket but foresee being in a lower one after you retire, you can benefit greatly from a traditional IRA, because your withdrawals will be taxed at your current rate. Many retirees fall to a lower tax bracket after they stop working, and this can save them on taxes.
To understand individual retirement accounts in more detail, please read the appropriate tutorials. There are also tutorials on Roth and education IRAs. In addition, you can read about how distributions from IRAs can be taken. Click here to learn even more about this topic with the Encyclopedia of Personal Finance™