The contribution limits for traditional IRAs can be low. In 2023, you can only contribute up to $6,500 for folks under 50 years old (up to $7,500 for people over 50). Some employer-sponsored retirement plans can reduce or eliminate someone's IRA contributions. If you withdraw from your account before you're 59 1/2, you'll not only have to pay taxes on that amount but you'll also have to pay a 10% penalty fee. You could also be charged a fee if you don't start withdrawing the required minimum distributions at age 73.