Why Traditional IRAs Deserve More Love Than They Get

Most retirement savers are obsessed with Roth accounts. Sure, they offer tax-free withdrawals in retirement—impressive. But here’s the thing: traditional IRAs pack some seriously underrated benefits of a traditional IRA that could work better for your situation. Let’s dig into why so many investors sleep on this option.

You Get Money Back from the IRS Right Now

Here’s the immediate win that Roth can’t touch: a traditional IRA delivers an upfront tax break the moment you contribute. In 2023, if you maxed out at $6,500 ($7,500 for those 50+), you just knocked that amount straight off your taxable income for the year. That’s not pocket change—depending on your bracket, this could actually lower your overall tax bill and let you keep more cash this year. With a Roth, you’re paying taxes now for benefits later. Traditional flips the script.

Your Money Grows Without Tax Interference

While your funds sit in a traditional IRA, they compound completely tax-free. No annual tax hit. No capital gains tax eating into your gains. Your money just grows, year after year, until you actually retire. Yes, the IRS eventually wants its cut—you’ll start taking required minimum distributions (RMDs) when you turn 73—but by then you’ve had decades of untaxed growth working for you.

You’re Not Locked Into Your Employer’s Investment Menu

401(k)s? They trap you in whatever handful of funds your company picked. Traditional IRAs? You pick the whole game. Want to go full individual stock picker? Go for it. Prefer boring index funds and low fees? Also an option. This flexibility matters because you’re playing with your retirement money—it should align with your actual risk tolerance and strategy, not some HR department’s choices.

Access Isn’t Gatekept by Salary

Here’s the accessibility advantage of a traditional IRA that gets overlooked: high earners can’t contribute to a Roth directly, but they absolutely can with a traditional IRA. Plus, you don’t need workplace access to get in the game. No 401(k) at your job? Traditional IRAs are still open to you. And if you’re married but not working? Your spouse’s income can cover your contributions through a spousal IRA arrangement. It’s remarkably flexible.

The Real Move: Stack Them

Traditional and Roth don’t have to compete. You can use both simultaneously—just keep your combined contributions under the annual limit. This lets you strategically optimize your tax situation depending on what you expect to earn and owe year to year.

The benefits of a traditional IRA aren’t flashy, but they’re legitimate. If you haven’t considered them seriously, now’s the time.