IRA (Individual Retirement Account)

Definition

An IRA is a personal retirement account that offers tax advantages to help your savings grow over time.

Main IRA types

• Traditional IRA: Contributions may be tax-deductible, and withdrawals are taxed in retirement.
• Roth IRA: Contributions are after-tax, and qualified withdrawals are tax-free.

Why people use IRAs

• Potential tax benefits
• Long-term compounding for retirement
• Wide range of investment choices

Important note

Annual contribution limits and income eligibility rules apply and can change over time.