In Defense of the Traditional IRA

For individuals filing income taxes in the United States, an option to deduct payments for traditional Individual Retirements Arrangements (IRAs) often exists. Note that an IRA account is not a repetitive misnomer although many refer to an IRA instead as an Individual Retirement Account. IRAs were created to aid those who did not have qualified pension plans and/or for those with lower incomes.
There are traditional (tax deductible), Roth (non tax deductible, named after its author), SEP, Self Directed, and Simple IRAs. The latter IRAs are generally for those who are self employed or do not otherwise have an employer supplied qualified pension plan (401[k] or 403[b]). This paper will focus on the traditional and Roth IRAs which are directed toward those who have ordinary income and may (or may not) have a pension plan. These often have the benefit of some employer matching; the matching amounts often range from some 25 or 50 percent to 100 or even 125 percent of the employee’s contribution.