Definition of individual retirement account
: ira
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Recent Examples of individual retirement account from the Web
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In the end, the legislation left 401(k)s and individual retirement accounts largely untouched.
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For example, an individual account, joint account, individual retirement account and Roth IRA each gets up to $500,000 worth of protection.
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Barbara Bush said her husband had proposed capital gains tax cuts, economic enterprise zones, and the use of individual retirement accounts to help struggling Americans buy homes — to no avail.
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So, too, for beneficiaries on individual retirement accounts, life insurance policies and 401(k) retirement accounts.
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Half of all states have considered plans to offer automatic individual retirement accounts, and at least five (California, Connecticut, Illinois, Maryland and Oregon) have begun offering them or have taken steps toward doing so.
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Edelman will gain access to a pipeline of retiring 401(k) investors, many of whom may wish to roll their money over tax-free to individual retirement accounts.
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The Republican candidate also listed four individual retirement accounts that have between $32.4 million and $149.8 million in assets.
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If there was an MVP of tax-refund investment strategies, stashing the money in an individual retirement account would get the trophy.
These example sentences are selected automatically from various online news sources to reflect current usage of the word 'individual retirement account.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
First Known Use of individual retirement account
1974
Financial Definition of INDIVIDUAL RETIREMENT ACCOUNT
individual retirement account
What It Is
An Individual Retirement Account (IRA) is a government sponsored, tax-deferred personal retirement plan.
How It Works
An IRA can also be referred to as a Traditional IRA.
In order to open an IRA, an individual must first establish an account with a bank, brokerage firm or mutual fund company. These firms then act in the capacity of a fiduciary. The individual is responsible for establishing the IRA and selecting the plan investments. Once the account has been established, the individual can contribute a maximum of several thousand dollars per year into an IRA. The IRA plan, which was established in 1974 by Congress, has been an extremely popular retirement savings plan for workers for over thirty years.
Taxes on Traditional IRA contributions and earnings are deferred until the account owner takes a distribution from the IRA. When money is withdrawn from a Traditional IRA it is taxed as regular income. Withdrawals are typically made when or after the plan owner has reached the age of 59 1/2. If the plan owner withdraws money from the account prior to retirement age, then he/she will incur a 10% penalty payable to the IRS (unless specific circumstances apply).
Why It Matters
An IRA is among several options Americans have when planning for retirement. The best option differs from one individual to another, so it is important for those planning for retirement to consider all of their options. To view an article going more in depth on IRAs as well as shedding light on a similar plan, a Roth IRA, click here.
Source: Investing Answers
Law Dictionary
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