Individual Retirement Account

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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,

References in periodicals archive ?
a Delaware Republican - the Roth IRA is a new type of individual retirement account available to taxpayers starting next year.
What we're really talking about is taking some small part of Social Security and allowing people to invest it'' in an account similar to an Individual Retirement Account or 401(k).
It is designed to provide guidance on planning for and handling the reporting of distributions from qualified plans and individual retirement accounts.
PSB, The Marketing SuperSource(R), a full-service, end-to-end marketing solutions provider for financial institutions, introduced two comprehensive marketing campaigns focused on Bump-UP Certificates and Individual Retirement Accounts (IRA).
1, 1996, precludes source taxation of distributions from qualified retirement and annuity plans, simplified employee pensions, tax-sheltered annuity contracts, individual retirement accounts, deferred compensation plans of state and local governments and tax-exempt organizations (under Sec.
Individual retirement accounts and 401(k) plans have also been curbed by recent tax law changes, but employee contributions to 401(k) plans exceeded $25 billion in 1988.
For instance, Jennings can minimize his future tax liabilities by opening a 529 account for education purposes, or opening tax deferrable individual retirement accounts.
For one obvious illustration of this problem, consider two common investment vehicles - tax-free municipal bonds and tax-deferred retirement savings programs such as individual retirement accounts, Keogh plans and 401(k) plans.
The husband transferred the entire distribution to his wife, who within 60 days used the money to establish two separate rollover individual retirement accounts (IRAs).
JSCI clients include individuals, corporations, banks, thrift institutions, pension and profit sharing plans, Individual Retirement Accounts, Simplified Employee Pension accounts, trusts, estates, charitable organizations and other business entities.
Bosarth wants Congress to cut income taxes, so workers have more to save, increase the amount they can save in tax-deferred accounts, and revive the use of Individual Retirement Accounts by making more people eligible to deduct the $2,000 they can invest annually.

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