Please stay tuned for important disclosure information at the conclusion of this episode.

Welcome to Investing Insights. I'm your host, Ivana Hampton. A distribution from your

traditional IRA could cost you if you're not aware of your responsibilities. Many investors are saving up

for their retirement and workplace accounts like 401Ks, and those administrators handle tasks that

IRA custodians don't, and it's up to you to take charge and keep track of your hard-earned

money, so you're not taxed twice. Denise Appleby is known as the IRA Whisperer.

The Morning Star Contributor has written about how to protect your IRA from costly mistakes.

Welcome back to the podcast, Denise.

So great to be here.

Thanks for having me.

Happy New Year. Can we still say that? We can.

Happy New Year. Let's start with a quick explainer. What is a traditional IRA and how can someone fund their account?

Okay. So a traditional IRA, IRA stands for individual retirement account. It's a retirement

savings vehicle that you can set up yourself because you know some of them like 401ks,

your employer can set it up, but you can set up your own IRA. And if you have eligible

compensation, you can make regular contributions to your traditional

IRA. You can roll over amounts from employer plans to your traditional IRA. You got to make sure,

though, that the amounts that you put into your IRA as a regular contribution does not exceed the statutory limits, because if it

does, then you're going to have what is referred to as an excess contribution, which is going to be

subject to a 6% excise tax where every year it stays in your account past the required correction

date.

Now, there are situations when a traditional IRA can hold pre-tax and after-tax money.

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