individual retirement account
Noun: 1. A specific type of tax-advantaged retirement savings account: An Individual Retirement Account (IRA) is a personal savings plan established in the United States that provides tax advantages for retirement savings. It allows an individual to set aside a limited amount of money each year, with the earnings on the investments growing tax-deferred or tax-free, depending on the type of IRA.
The term "individual retirement account" is used to refer to the financial vehicle itself. It is often abbreviated as IRA. - You open an individual retirement account with a bank or brokerage firm. - Contributions to a traditional individual retirement account may be tax-deductible. - The money in your individual retirement account is intended for use during retirement.
- "To roll over funds into an individual retirement account": This refers to the process of moving retirement savings from one qualified plan (like a 401(k)) into an IRA without tax penalties.
- After leaving his job, he completed a rollover of his 401(k) into an individual retirement account.
- IRA: The standard and most common abbreviation for "individual retirement account."
- Traditional IRA: A type of individual retirement account where contributions may be tax-deductible, and taxes on investment gains are deferred until withdrawal.
- Roth IRA: A type of individual retirement account where contributions are made with after-tax dollars, but qualified withdrawals in retirement are tax-free.
- Rollover IRA: An individual retirement account created specifically to hold funds moved from a qualified employer-sponsored retirement plan.
- Retirement savings account: A general term for any account designed to hold funds for retirement.
- Pension plan (in a broad sense): While not a direct synonym, it is sometimes used informally to refer to personal retirement savings vehicles, though a pension typically refers to an employer-sponsored defined benefit plan.
- "To contribute to an individual retirement account": The act of depositing money into the account.
- It's wise to contribute to an individual retirement account early in your career.
- "Individual retirement account distribution": A withdrawal or payout of funds from the account.
- He started taking required minimum distributions from his individual retirement account at age 72.
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a retirement plan that allows you to contribute a limited yearly sum toward your retirement; taxes on the interest earned in the account are deferred
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