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The Traditional IRA has been the backbone of countless Americans' retirement plans since it was first introduced in the mid-1970's. Its value to the long-term accumulation of wealth has become indisputable.

Yet, after all that time, the rules surrounding the establishment and use of an IRA remain complex and intimidating to many people. Oftentimes, this lack of understanding leads many to miss out on a tremendous opportunity to maximize the growth of their investments.

Here is some basic information you need to consider with regards to opening a Traditional IRA, as well as the basic steps involved:

-Who Should Use A Traditional IRA?-

A Traditional (tax-deductible) IRA is ideal for people who are intent on accumulating assets to help fund their eventual retirement. Since the Traditional IRA owner is penalized for most types of withdrawals before age 59 , this is not a good place to set aside funds for short and medium-term goals.

From a tax standpoint, the Traditional IRA will most benefit people who expect to be in a higher tax bracket during the working years, than in retirement. This is due to the fact that you receive a deduction for your contributions to the Traditional IRA now, but must pay tax on whatever balances you withdraw later.

-What Level of Return Can I Expect From My Traditional IRA-

Due to the IRA's early embrace by the banks, who basically sold them as "retirement CD's", many people still think that IRA's pay a fixed rate of return. While you still can buy CD's within your Traditional IRA, most institutions now allow the full spectrum of stocks, bonds, and mutual funds. In short, your IRA's return will vary widely based on what investment vehicles you chose.

-Steps in Setting Up a Traditional IRA-

1. Decide if you want help or can manage it yourself.

By doing it yourself, you will likely save some money on your annual IRA fees and investment costs. But you will also be more on your own to navigate the complex paperwork and countless investment choices.

By answering this question, you are narrowing the field with regards to what companies you will approach to establish your Traditional IRA. If you are feeling empowered, and want to go it alone, you will want to look at some of the discount and low-cost brokerage companies. If you prefer someone walking along side you, you should consider one of the full-service Wall Street firms or a large bank.

2. Do the paperwork right the first time!

After you've selected an institution, you will be provided with an IRA

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