Individual retirement accounts (IRAs) are one of the most popular tools for building retirement savings. About 42 percent of U.S. households own an IRA, according to the Investment Company Institute.
A traditional IRA allows you to deduct your contribution from your income, which can reduce your taxes and make it easier on your budget to save.
For example, suppose you’re in the 24 percent federal income tax bracket. To save $7,500 for retirement in a fully taxable account, you would have to earn about $9,868 before taxes.