For many years the Traditional IRA was the only type of IRA available to those investing for retirement. Even after the tax-free Roth IRA was introduced in 1997, some investors still find that the Traditional IRA fits well in their retirement investment plan.

Advantages
  • You may be able to deduct some or all of your contributions, including catch-up contributions, depending on your income, filing status and participation in an employer-sponsored retirement plan.
  • Generally, earnings grow tax deferred and are taxed at your ordinary income tax rate upon withdrawal.
  • CheckWriting is available to investors who are over age 59½.
Eligibility
  • You must be under the age of 70½ on December 31.
  • You or your spouse (if you are not working and file a joint return) must receive taxable compensation (earned income) during the year.
Investment Choices Choose from over 10,000 mutual funds, as well as publicly traded stocks and bonds.
Minimum Initial Investment $2,500
Annual Contribution Limits
Annual Contribution Limits for Individuals Annual "Catch-Up" Contribution Limits for Individuals Age 50 and Older (in addition to annual contribution):
2012 $5,000 2012 $1,000
2013 $5,500 2013 $1,000
Deductible Traditional IRA Phaseouts Deductibility depends on Modified Adjusted Gross Income (MAGI)1 and whether you or your spouse is covered by an employer-sponsored retirement plan. You must figure your deduction and your spouse's deduction separately. The deduction for contributions to Traditional IRAs phases out over the following MAGI levels:
Covered by Employer Plan 2012 2013
Single $58,000-$68,000 $59,000-$69,000
Married Filing Jointly $92,000-$112,000 $95,000-$115,000
Not Covered by Employer Plan 2012 2013
Single or married filing jointly with a spouse who also is not covered No limit No limit
Married filing jointly with a spouse who is covered $173,000-$183,000 $178,000-$188,000
There is no income limit for contributions to a non-deductible Traditional IRA.
Withdrawals
  • Early withdrawal penalties may apply for withdrawals prior to age 59½.
  • Withdrawals for special purposes may be permitted prior to retirement.
Service Fees An annual IRA custodial fee may apply.
Secure Online Account Access Simply create a User Name and Password and Log In for secure online account access, to:
  • View account balances
  • Conduct online transactions
  • View online statements
  • And more...

1Modified Adjusted Gross Income (MAGI) is your Adjusted Gross Income (AGI) with standard deductions included.

IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

This information is for educational purposes only and not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.

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