Legal-Explanations.com - Legal resources in plain English
Legal-Explanations.com Home > Legal Definitions
 

Individual Retirement Account (IRA)

"A personal savings plan that provides tax advantages to save and invest for retirement. Depending upon individual circumstances such as participation in employee-sponsored plans such as a 401(k) plan, contributions can be tax-deductible. Until the earnings are withdrawn, a traditional IRA will not be taxed. In a Roth IRA, withdrawals are tax-free as long as the requirements are met. Tax penalties may be incurred for funds withdrawn before age 59 1/2. An individual's IRA contributions cannot exceed $3000 (as of tax year 2004).

 
Legal-Explanations.com Home
About us | Contact us | Privacy | Terms of service

2004 - 2007 Legal-Explanations.com. All rights reserved