Individual Retirement Account


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Related to Individual Retirement Account: Roth Individual Retirement Account

Individual Retirement Account (IRA)

A retirement account that may be established by an employed person. IRA contributions are tax deductible according to certain guidelines, and the gains in the account are tax-deferred.

Individual Retirement Account (IRA) rollover

A provision of the law governing IRA's that enables a retiree or anyone receiving a lump-sum payment from a pension, profit-sharing, or salary reduction plan to transfer the amount into an IRA.

Individual Retirement Account

An account into which a worker makes contributions up to a certain limit throughout his/her working life, and from which he/she begins to take distributions following retirement. There are two types of IRA. A traditional IRA allows for tax deductible contributions and taxable distributions, while a Roth IRA has non-deductible contributions and tax-free distributions. The limit to annual contributions to an IRA varies each year and is indexed to inflation. IRAs are invested in securities and usually own common stock and certificates of deposit. See also: 401(k).

individual retirement account

See IRA.

Individual retirement account (IRA).

Individual retirement accounts are one of two types of individual retirement arrangements (IRAs) that provide tax advantages as you save for retirement. The other is an individual retirement annuity.

Both have the same annual contribution limits, catch-up provisions if you're 50 or older, and withdrawal requirements. In addition, both are available in three varieties: traditional deductible, traditional nondeductible, and Roth.

The primary difference between the two is in the investments you make with your contributions.

You open an individual retirement account with a financial services firm, such as a bank, brokerage firm, or investment company, as custodian. The accounts are self-directed, which means you can choose among the investments available through your custodian.

In common practice, however, perhaps because more people have individual retirement accounts, the acronym IRA tends to be used to refer to an account rather than annuity or arrangement.

individual retirement account (IRA)

A retirement savings program entitling the individual to deduct contributions from gross income for purposes of calculating income taxes.The contributions are said to be from before-tax dollars.

Generally speaking, first-time home buyers can withdraw up to $10,000 from their IRA or Roth-IRA accounts,penalty free,in order to pay qualified home purchase expenses such as a down payment. Spouses can withdraw up to $20,000.There's a lifetime limit,though.Once you use up your distribution “free passes,”you can't put the money back in your account and then use it again in the future. (For more information, see Tax Topic 428,“Roth IRA Distributions,” and Publication 590,“Individual Retirement Accounts,”available at the IRS Web site, www.irs.gov.)

References in periodicals archive ?
The target audience were relatively unsophisticated individuals who had Individual Retirement Accounts.
They also can be maintained as individual retirement accounts (IRA) or 401 (k) accounts.
When reviewing a divorcing couple's assets, it is not uncommon to discover that substantial assets have been invested in qualified retirement plans and individual retirement accounts (IRAs).
Among the major items: most taxpayers would get a $500 tax credit for each child under age 17; many taxpayers could set up college savings accounts similar to Individual Retirement Accounts and take a $1,500 tax credit for college tuition and expenses; the maximum tax rate on capital gains would be 20 percent, instead of 28 percent; and heirs would be able to inherit up to $1 million, instead of the current $600,000, without paying estate taxes.
These include 401(k) and 403(b) plans, Individual Retirement Accounts (IRAs), Keogh plans, and annuity products, which can also provide guaranteed lifetime retirement income.
You might have missed it in the everything-but-the-kitchen-sink Small Business Job Protection Act of 1996, but a provision in the law almost doubles the amount that a couple with a nonworking spouse can contribute to individual retirement accounts.
While these distributions do not trigger an immediate taxable event for investors who own funds in tax-deferred vehicles such as 401k plans or Individual Retirement Accounts, investors with taxable accounts are subject to immediate capital gains taxation.
As these new IRA providers join our network, many more plan sponsors and service providers are looking to clean up their plans and move participants into individual retirement accounts.
403(b) plans, individual retirement accounts (IRAs) and defined benefit plans) could be eaten up in the form of taxes.
In addition, the Signature Online(SM) center provides essential information on such retirement-related topics as improving credit, minimizing taxes, and choosing retirement vehicles outside the workplace, including Individual Retirement Accounts (IRAs).
Individual retirement accounts (IRAs) are personal retirement savings plans that allow eligible individuals to contribute up to $2,000 per year, both deductibly and nondeductibly with the benefit of tax deferral on the growth and on pretax contributions until withdrawal.
TOPIC: The Supreme Court ruled unanimously that creditors may not seize Individual Retirement Accounts (IRAs) from people who file for bankruptcy, according to an article by The Associated Press.

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