A traditional IRA, or Individual Retirement Account, is a designated monetary account that workers can pay into in order to have savings for their retirement. Traditional IRAs are held by banks or other financial institutions.
Unlike Roth IRAs, there is no limit on who can qualify for a traditional IRA as long as the account holder is able to make contributions to the account. Making contributions to the account works much the same way as putting money into a regular savings account, except that the money in a traditional IRA cannot be withdrawn prior to retirement without incurring penalties. Traditional IRA contributions are usually tax deductible.