Retirement accounts: What an IRA is -- and why you need one

What is a traditional IRA?

A traditional IRA is a tax-advantaged savings account that you’re free to use to save for retirement.

Traditional IRAs are the most popular pop in of retirement account, with23% of Americansowning one.

There is, however, an early withdrawal penalty for traditional IRAs.

What is a Roth IRA?

In 2021, as a single person filing your total income must not exceed $140,000.

For married couples filing jointly, the limit this year is $208,000.

Another benefit in the long run is avoiding required minimum distributions (RMDs).