Individual Retirement Accounts (IRAs)

An individual retirement account (IRA) is a personal savings account that allows taxpayers in the United States to set aside money for retirement. This particular vehicle offers special tax advantages for account holders. The umbrella term for the concept is, legally, “individual retirement arrangement.” The IRA can be either an annuity (typically deferred) or a trust. Either way, it must be set up according to specific criteria defined by the Internal Revenue Service. The funding by financial instruments turns the arrangement into an account, and this reality is why IRAs are commonly referred to as “accounts.”