A Roth individual retirement account (IRA) is a wise choice for many people: But there also are smart reasons why you might choose a traditional IRA as a savings vehicle for retirement—especially if you’d like to reduce your tax burden now, not when you retire.

Contributions to a traditional IRA are tax-deductible when you make them, up to government-set income limits. Contributions to a Roth IRA aren’t deductible, but withdrawals are tax-free (again, subject to limits). With a traditional IRA, you get a tax deduction up front, and income and growth on the IRA is tax deferred until you withdraw funds. This can be especially valuable if it allows you to contribute more to your IRA (within contribution limits)—every dollar you sock away will have more time to grow through the powerful effect of compound interest.

A traditional IRA also can make sense if you believe you’ll receive less income when you quit working.For many people, traditional IRAs come with another advantage: If you’re not covered by a retirement plan at work, your IRA contributions or tax deduction aren’t limited, even if your income is above a certain level. With a Roth IRA, allowable contributions are curtailed and then eliminated as your modified adjusted gross income, as determined for tax purposes, reaches specified levels. If you or your spouse is covered by another plan at work, income-based limits do apply to both Roth and traditional IRA contributions.

Ally Bank has IRA products that can help you meet your retirement needs with the kind of flexibility that smart retirement planning requires. We offer a range of retirement products that fit your needs no matter where you are in your planning process—with no minimum opening deposit required. You can rest easy knowing your deposits are FDIC-insured up to the maximum allowed by law. Learn more at Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559).

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