Individual retirement account (IRA),
Definition of Individual retirement account (IRA):
Tax-deferred retirement schemes that can be started by anyone who earns employment income. Individuals who earn less than a certain amount (or who do not participate in their employers retirement plan) can generally deduct a part or all of their contribution to such schemes from their taxable income. Money in an IRA is taxed only when it is withdrawn.
An individual retirement account (IRA) is a tax-advantaged investing tool that individuals use to earmark funds for retirement savings. There are several types of IRAs as of 2020:.
Traditional IRAsRoth IRAsSEP IRAsSIMPLE IRAs.
How to use Individual retirement account (IRA) in a sentence?
- IRAs are tax-advantaged investing tools for individuals to earmark their retirement savings.
- If you withdraw money from an IRA before age 59½, you are usually subject to an early-withdrawal penalty of 10%.
- Rules regarding maximum contributions and income limits for IRAs change each year.
- There are income limitations for contributing to Roth IRAs and deducting contributions to traditional IRAs.
- Depending on the individual's employment status, IRAs can be of various types and have different tax liabilities.
Meaning of Individual retirement account (IRA) & Individual retirement account (IRA) Definition