Individual Retirement Account (IRA)

    If you’re looking for a tax-advantaged way to save for retirement and build the future you envision, you may want to consider an individual retirement account (IRA). Compared to 401(k)s, which are usually provided by an employer, IRAs are set up by individuals through a financial services provider, such as an investment firm or bank. You can choose from a number of investment options within your IRA including mutual funds, individual securities and annuities. There are two common types of IRAs: traditional IRAs and Roth IRAs, which have different eligibility requirements, contribution caps and tax advantages.

    Tax Advantages

    Depending on whether you choose a traditional or Roth IRA, you’ll enjoy different tax benefits. With a traditional IRA, your contributions may be tax-deductible, and earnings in the account grow tax-deferred until you start taking withdrawals. A traditional IRA may be a good choice if you’re in a higher tax bracket now than you will be during retirement. With a Roth IRA, your contributions are made with after-tax money, so they are not tax-deductible, but earnings grow tax-deferred and withdrawals are tax-free, if certain conditions are met. You should carefully consider the age that you start taking withdrawals since taxes and penalties may be assessed prior to age 59 ½.

    Investment Flexibility

    With both traditional and Roth IRAs, you can choose from a broad range of investment vehicles depending on your goals and risk tolerance. Your IRA can hold mutual funds; individual securities such as stocks, bonds and exchange-traded funds; and annuities. If you are considering an annuity, you should know that annuities do not provide any additional tax advantages when used to fund a qualified plan, such as an IRA. Investors should consider buying an annuity to fund a qualified plan for the annuity’s additional features, such as lifetime income payments, living benefits and death benefit protection.

    The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

    Securities offered through registered representatives of MML Investors Services, LLC (MMLISI) and registered representatives of MSI Financial Services, Inc. (also known as MetLife Securities in some states). Members SIPC® ( and FINRA ( MMLIS and MSI Financial Services are subsidiaries of Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001.

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