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Individual Retirement Accounts (IRAs)

An Individual Retirement Account (IRA) is a personal savings account which allows taxpayers in the United States to set aside money for retirement, while offering tax advantages. The umbrella term for the concept is legally Individual Retirement Arrangement. The IRA can either be an annuity (typically deferred) or a trust set up that meets specific criteria the Internal Revenue Service (IRS) has defined. This trust and funding by financial instruments makes it an account, and thus the term Individual Retirement Account is the most common name by which IRAs are known.

Traditional IRAs and Roth IRAs

Congress established IRAs in 1974 to encourage people to save toward their retirement. Contributions may be made to traditional IRAs if the taxpayers received taxable compensation during the year and ...

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