1. What is Traditional IRA?

A Traditional IRA (Individual Retirement Account) is a tax-advantaged retirement savings account that allows individuals to make pre-tax contributions, with taxes deferred until withdrawal during retirement.

2. How Does the Calculator Work?

The calculator uses the Traditional IRA contribution formula:

Where:

• $7,000 — Standard annual contribution limit for 2024
• $1,000 — Catch-up contribution for individuals age 50 and older
• Age — Your current age in years

Explanation: The calculator determines your maximum allowable Traditional IRA contribution based on IRS limits and age eligibility for catch-up contributions.

3. Importance of IRA Contribution Limits

Details: Understanding contribution limits is crucial for retirement planning, tax optimization, and avoiding IRS penalties for over-contributions.

4. Using the Calculator

Tips: Enter your current age in years. The calculator will automatically determine if you qualify for catch-up contributions and display your maximum allowable contribution for 2024.

5. Frequently Asked Questions (FAQ)

Q1: What is the difference between Traditional and Roth IRA?
A: Traditional IRA offers tax-deductible contributions with taxable withdrawals, while Roth IRA uses after-tax contributions with tax-free qualified withdrawals.

Q2: Are there income limits for Traditional IRA contributions?
A: No income limits for contributions, but deductibility may be limited if you or your spouse have workplace retirement plans and higher incomes.

Q3: When can I withdraw from Traditional IRA without penalty?
A: Generally at age 59½, with required minimum distributions starting at age 73 (as of 2023).

Q4: Can I contribute to both Traditional and Roth IRA?
A: Yes, but your total contributions to all IRAs cannot exceed the annual limit across all accounts.

Q5: Do contribution limits change annually?
A: Yes, IRS adjusts contribution limits periodically for inflation. Always check current year limits.