What is IRA?
Individual Retirement Accounting (IRA):were set up by Congress in 1984 to further increase the incentives to save for retirement. It allows employees to contribute a portion of their income into the retirement accounts that can be used for later. As far as retirees are concerned, 401k plans and IRAs are in most respects identical; employees can use both, combining the benefits from each. The IRS allows you to choose two very different schedules of tax shelters for your retirement accounts: one is called traditional (introduced first) and the other, Roth (after the congressman who proposed it).
What is traditional IRA?
Contributions to traditional retirement accounts are tax deductible, as are the earnings in the account until retirement