Upon withdrawal, your pretax contributions and earnings are taxed at your ordinary tax rate. Nondeductible Traditional IRAs. Your earnings grow tax-deferred until you withdraw the money at retirement. Upon withdrawal, your earnings are taxed at your ordinary income tax rate. Your earnings grow tax-deferred until you withdraw the money at retirement.
Withdrawals are exempt from taxes under certain conditions.
A generation ago, most Americans worked until age 65, or beyond. These days, only one in six Americans waits until age 65 to retire, according to the 1995 Advisory Council on Social Security. That means you could end up living far more years in retirement than you expected, or saved for. If you are like most Americans, you will look to Social Security to help finance your retirement. The amount of your Social Security payments is determined, in part, by your age when you retire.