individual retirement account

An Individual Retirement Account (IRA) is a type of retirement savings arrangement that allows individuals to save for retirement on a tax-deferred basis. Contributions to an IRA may be tax-deductible, and earnings within an IRA grow on a tax-deferred basis until the money is withdrawn during retirement. IRAs are popular retirement savings options for individuals who do not have access to an employer-sponsored retirement plan, such as a 401(k). They are self-directed and can be used to invest in a variety of assets, including stocks, bonds, and mutual funds. Withdrawals from an IRA must meet certain requirements and be taken when the account owner reaches retirement age (59 1/2). Contributions to an IRA may be limited depending on income levels and other factors.