How Do You Define Individual Retirement Accounts?
Saving and investing for retirement is vital for most people. You may have an employer-provided pension plan or a 401(k) plan. If you don’t, or if you want to add to your retirement nest egg, Individual Retirement Accounts (IRAs) are an option. It’s easy to define Individual Retirement Accounts in general. However, there are several types and each has distinctive features. In order to select the right IRA for your needs, you should learn the specific rules and definition of each type of IRA. Define Individual Retirement Accounts according to their type and how they are managed. An IRA is a tax-deferred investment and/or savings account. The two basic types are the traditional IRA and the Roth IRA. A traditional IRA allows you to deduct your contribution each year from your taxes, but you pay taxes on money withdrawn from the account after retirement. With a Roth IRA you get no tax deduction up front. However, once you retire, the money you withdraw from the IRA is not subject to income
