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The Traditional IRA is the original form of the IRA that has been around for decades. It's primarily known for its tax benefits at the time of contribution. With a Traditional IRA, contributions made can typically be deducted from your taxable income, thereby providing an immediate tax break. For instance, if you contribute $1,000, you can reduce your taxable income by the same amount, leading to instant tax savings.
However, while the Traditional IRA offers up-front savings, it also comes with the obligation of future taxation. When you withdraw funds during retirement, those distributions are taxed as regular income. Consequently, the IRS collects its share of taxes on the gains generated in the account over the years.