Traditional and Roth IRAs can help you save for retirement on a tax-favored basis. Contributions to a traditional IRA reduce your current tax bill, if you’re eligible, and earnings are tax-deferred. However, withdrawals are taxed in full (plus a 10% penalty if taken before age 59½, unless an exception applies). Roth IRA contributions aren’t deductible. But earnings are tax deferred and withdrawals are tax free if certain conditions are met. The maximum annual IRA contribution is $6,000 for 2022 and 2021 ($7,000 if age 50 or over). In addition, your contribution can’t exceed your compensation includible in income for the year. There’s no age limit for making contributions if you’re eligible.