IRAs IRAs Offer Tax Benefits.IRAs (Individual Retirement Accounts) are basically savings accounts with a big tax break. You can hold an IRA account at a bank, a broker, a mutual fund company, or through a financial advisor.Types of IRAs include:Traditional IRAs that provide tax-deferred savings,Roth IRAs that offer tax-free growth,Rollover IRAs are for individuals that have left a company plan, but want to keep control of their own money, andSEP IRAs or SIMPLE IRAs that are offered by small companies for their employees.Tax Deduction.Traditional IRAs allow you to subtract the amount contributed from your current taxable income. If Jane earns $50,000 and contributes $5,000 to her IRA, she will only be taxed on $45,000. However, she will pay income tax at her full marginal rate on the $5,000 plus any earnings it has had when she withdraws that money to spend in retirement.Limits.You may only contribute up to a certain limit each year to your IRA. The limit is higher if you are age 50 or older. Your spouse may do the same into his/her own IRA. These limits apply to both traditional and Roth IRAs, but not to rollovers. Talk with your CFP® to determine the exact current limit for you.Eligibility.The deductibility of your traditional IRA contribution depends on your income and filing status and often changes each year. Roth eligibility also phases out at very high income levels. Talk with your CFP® to see how much you are eligible to contribute.Withdrawals.Withdrawals from traditional IRAs are generally subject to a 10% penalty prior to age 59½, plus income tax, although some exceptions to the penalty (not the tax!) are available at age 55. Withdrawals of earnings from a Roth are subject to the same 10% penalty, but contributions can be withdrawn more easily.Required Minimum Distributions.You have to start taking withdrawals from a traditional IRA by April of the year after the calendar year in which you turn 70½. This is not applicable to Roths.