The benefits associated with traditional individual retirement accounts (IRAs) are numerous. There are tax advantages, and IRAs offer an impressive range of investment options. In addition, IRAs are flexible, and they allow you to make catch-up contributions once you reach the age of 50. Thanks to compounding returns, IRAs can grow dramatically in value given enough time.
As of mid-2024, 44% of households reported holding at least one IRA, making it one of the most popular ways to save for retirement.
Like other investment vehicles, however, IRAs require that investors follow specific rules, and mistakes can be costly. Here are five of the most common IRA mistakes and how to avoid them.