An IRA allows an investor to deduct $10,000 or more from taxable income and invest the funds tax-free until withdrawal at retirement.

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An IRA typically allows for a maximum contribution of $6,500 (or $7,500 if age 50 or older) for 2023, and contributions may be tax-deductible depending on the individual's income and tax filing status. The funds grow tax-deferred, not tax-free, until withdrawal.

An IRA Allows an Investor to Deduct $10,000 or More