What Is Traditional IRA?
A retirement account funded with pre-tax dollars; you pay taxes when you withdraw.
The Full Definition
A Traditional IRA allows you to contribute pre-tax dollars (reducing your taxable income today) and defer taxes until you withdraw the money in retirement. The same contribution limits apply as a Roth IRA: $7,000/year ($8,000 if 50+) for 2026. A Traditional IRA makes the most sense if you expect to be in a lower tax bracket in retirement than you are now — you save taxes at today's higher rate and pay them at a lower future rate.
Real-World Example
Contributing $7,000 to a Traditional IRA while in the 24% tax bracket saves you $1,680 in taxes this year. But when you withdraw in retirement from a lower bracket, you'll pay less. The key trade-off vs. a Roth: tax now or tax later.