Individual retirement account (IRA) Close
The two main types of IRAs are regular and Roth IRAs. Regular IRAs are also called traditional IRAs because they were the first IRAs introduced back in 1981. Roth IRAs were introduced in 1998. Regular IRAs allow you to make a tax-deferred yearly contribution of $6,000 in 2019. For persons who are age 50 or older, a special catch-up provision allows you to contribute an additional $1,000, or a total of $7,000, for 2019. This account grows tax-deferred until you begin to take distributions, which you can do after you turn age 59-1/2. Roth IRAs require you to pay income taxes in the year that you make the contribution. You also can contribute $6,000 per year in 2019 ($7,000 if age 50 or older). Roth IRAs grow tax-deferred, and if you keep the account for at least five years and are at least 59-1/2, the entire account can be distributed tax- and penalty-free.