What Is IRA (Individual Retirement Account)? Meaning & Example
Definition
An IRA is a US retirement account you open yourself that offers tax advantages for long-term saving. Traditional IRAs may offer tax-deductible contributions, with taxes paid on withdrawal.
Related terms
A Roth IRA is a US retirement account funded with after-tax money, where qualified withdrawals in retirement are tax-free. Income limits and rules apply.
401(k)A 401(k) is a US employer-sponsored retirement account that lets workers invest part of their paycheck with tax advantages. Many employers add matching contributions.
Tax-Advantaged AccountA tax-advantaged account offers tax benefits such as deductions, tax-deferred growth or tax-free withdrawals. Rules and limits vary by account type and country.
What is IRA (Individual Retirement Account)?
An IRA is a US retirement account you open yourself that offers tax advantages for long-term saving. Traditional IRAs may offer tax-deductible contributions, with taxes paid on withdrawal.
Can you give an example of IRA (Individual Retirement Account)?
Someone without a workplace plan might open an IRA to invest for retirement in index funds.