Individual Retirement Account
DefinitionIRA. A tax-deferred retirement account for an individual that permits individuals to set aside money each year, with earnings tax-deferred until withdrawals begin at age 59 1/2 or later (or earlier, with a 10% penalty). IRAs can be established at a bank, mutual fund, or brokerage. Only those who do not participate in a pension plan at work or who do participate and meet certain income guidelines can make deductible contributions to an IRA. All others can make contributions to an IRA on a non-deductible basis. Such contributions qualify as a deduction against income earned in that year and interest accumulates tax-deferred until the funds are withdrawn. A participant is able to roll over a distribution to another IRA or withdraw funds using a special schedule of early payments made over the participant's life expectancy.
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Individual Retirement Account is ...
... part of the Retirement and Taxes subjects.
... part of the Retirement and Taxes subjects.
Related Terms
rollover, excess accumulation, excess contribution, Keogh Plan, Simplified Employee Pension IRA, Single-Premium Deferred Annuity, spousal IRA, direct transfer, direct rollover, group IRA
Individual Retirement Account appears in the definitions of these other terms on BusinessDictionary.com
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