Terms

Individual Retirement Account

Abbreviation
IRA

An Individual Retirement Account, IRA, is a personal savings plan which allows you to set aside money for retirement, while offering you tax advantages. Depending on the individual's employment status, IRAs can be of various types and have different tax liabilities. There are several types of IRAs as of 2020 including Traditional IRAs, Roth IRAs, SEP IRAs, and Simple IRAs. There are income limitations for contributing to Roth IRAs and deducting contributions to traditional IRAs. Rules regarding maximum contributions and income limits for IRAs change each year.