Your contribution to a Traditional IRA may be tax-deductible,
depending on your income and whether or not you participate in
a retirement plan at work. Use our Guide to Traditional IRA Deductions to check your IRA deductibility.
If you are eligible for a tax deduction, your current-year tax bill will shrink every time you invest. For example, if you're in a 28% bracket and make a $5,500 ($6,500 if age 50 or older) fully deductible contribution to a Traditional IRA, you'll save $1,540 on your taxes that year.
Whether or not your contributions are deductible, all earnings
in a Traditional IRA grow tax-deferred. You don't pay taxes until
you withdraw your money,¹ which usually is during retirement when
you may be in a lower tax bracket.