In 1997, Congress passed the Taxpayer Relief Act of 1997 which, among other things, created several classes of individual retirement account or IRA. The term "traditional" refers to the sole type of IRA that existed before passage of this bill (and which still exists today). The Traditional IRA is distinguished primarily by the ability (assuming you meet certain income requirements) to deduct the amount of your annual contributions from your income for federal tax purposes. You may make nondeductible contributions to a Traditional IRA if you do not meet the deductibility criteria, but you must then file IRS Form 8606 with your federal income tax.

Owners of Traditional IRAs are also required to begin taking withdrawals from these accounts after they reach age 70 1/2. In addition to their other advantages, Roth IRAs never compel you to withdraw assets.

If I had to wager, I'd say that the Traditional IRA is a dying breed, especially as it is possible to move money from a Traditional IRA into a Roth (if you're willing to pay income taxes on the amount of the transfer). Still, I guess it's good to have a choice.

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