If you earn money, pay taxes, and want to save money to live on in retirement, individual retirement accounts can help you do so by providing valuable tax benefits. With a Traditional IRA you save income taxes up front because funds you contribute are pre-tax: when you put $6,500 in an IRA, your taxable income by $6,500. If you’re in a 30% tax bracket, that lowers your tax bill by $1,800. Money grows in the account tax-deferred, and you only pay income taxes as you take distributions in retirement. At that point, you’re likely to be in a lower income tax bracket. If you think you’ll be in a higher tax bracket, you can put money into a Roth IRA: the money is taxed up front, but you get tax free withdrawals.