A Traditional IRA is a personal retirement account: contributions may be deductible (depending on income and workplace plan coverage), growth is tax-deferred, and withdrawals are taxed as ordinary income. An IRA can be set up as an individual retirement annuity issued by an insurer, which is how it connects to a life agent's work.

1. Contribution limit (2026, per IRS): $7,500, or your taxable compensation if less. A non-working spouse can contribute through a spousal IRA if a joint return is filed; each spouse can contribute up to the limit. Excess contributions face a 6% excise tax for each year they stay in the account. 2. Catch-up (age 50+, 2026): an extra $1,100, for a total of $8,600. 3. Age: since 2020 there is no age limit on making regular contributions. Required minimum distributions (RMDs) generally must start at age 73. A missed RMD may face a 25% excise tax, reduced to 10% if corrected within two years. 4. Early withdrawal: before 59½, a 10% additional tax applies unless an exception fits, such as death, total and permanent disability, a first-time home purchase (up to $10,000), qualified higher education expenses, certain unreimbursed medical expenses, a birth or adoption ($5,000), or substantially equal periodic payments. 5. What an IRA cannot buy: life insurance contracts, and collectibles (art, rugs, antiques, metals, gems, stamps, most coins, alcoholic beverages), with an exception for certain government-issued coins and bullion.