Home > Bank > Savings > IRAs & Retirement > Traditional IRAs - Sandia Area

What is a Traditional IRA?

Unlike a Roth IRA, the original contributions you make to your Sandia Area Traditional IRA account may be tax-deductible and your account's earnings are tax deferred. You'll have more to invest, maximizing the potential of your earnings. When you retire, withdrawals are taxed as regular income. If your original contributions were not tax-deductible, then they can be withdrawn federally tax free (state taxes may apply). If you withdraw either your original contribution or earnings before age 59½, then you may also be subject to a 10% additional tax.

Tax advantages

  • Contributions are tax-deductible, subject to certain limitations.1
  • Taxes are deferred on earnings until you begin withdrawing funds.
  • Withdrawals are taxable.


  • Maximum contributions for 2023: Up to $6,500 for those under 50; $7,500 for those 50 and up.


  • Anyone with earned income may contribute.

Withdrawals, penalties and distribution requirements

  • All earnings and deductible contributions are taxable upon withdrawal.
  • Penalties will be assessed if withdrawals are taken before age 59-1/2, or if withdrawals are not taken by age 73.
  • Required minimum distributions upon reaching age 73.

¹Not intended as tax advice. Please consult a tax professional. The above descriptions are meant to be educational in nature. Certain restrictions apply to every type of IRAs to take full advantage of their favorable tax treatment. It's important to understand the requirements and limitations on the various IRAs. Sandia Area Membership is required for all accounts.

Go to main navigation