Which of the following is a characteristic of a traditional IRA?

A traditional IRA, or Individual Retirement Account, is designed to provide tax advantages for retirement savings. One of the key characteristics of a traditional IRA is that contributions made to the account can be tax-deductible, depending on the taxpayer's income and whether they or their spouse are covered by a workplace retirement plan. This means that when you contribute to a traditional IRA, you can potentially lower your taxable income for the year in which the contributions are made.

In contrast, contributions made to a Roth IRA are made with after-tax dollars, and withdrawals from a Roth IRA during retirement are tax-free. Therefore, those options do not align with the fundamental principles of a traditional IRA. Additionally, there are no age restrictions for contributing to a traditional IRA; individuals can contribute regardless of whether they are under or over 50 years old, although there are different contribution limits based on age.

Understanding that the ability to deduct contributions on your taxes is central to the appeal of traditional IRAs helps clarify why this characteristic stands out as correct.