IRA

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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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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).
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

IRA

A custodial account or trust in which individuals may set aside earned income in a tax-deferred retirement plan. For individuals who earn under a specified amount or who are not in an employer-sponsored retirement plan, contributions to an IRA (subject to an annual maximum) are deferred along with any income the contributions earn. Withdrawals at retirement are fully taxable. For individuals in an employer-sponsored plan and having an adjusted gross income above a specified amount, all or part of the contribution may be taxable although any income earned in the IRA is tax deferred. The rules governing IRAs were significantly altered in the 1986 tax reform. IRA investment opportunities include certificates of deposit, mutual funds, and securities purchased through brokerage accounts. Also called individual retirement account. See also Coverdell Education Savings Account, Keogh plan, Roth IRA, self-directed IRA, simplified employee pension plan.
Is it a good idea to name my estate as the beneficiary of my IRA?

Generally speaking, this is not advisable. If you name your estate as the beneficiary of your IRA, then the assets held inside your IRA must be distributed according to your last will and testament and the proceeds of your IRA will go through probate. Most IRA owners like to keep assets inside their IRA for the longest time period allowed by law, thereby maximizing the dollars that can be accumulated on a tax-deferred basis while also delaying the payment of income taxes for as long as possible. IRAs are subject to annual required minimum distribution requirements once the IRA owner reaches age 70 1/2 . These requirements are based upon either the individual life expectancy of the IRA owner or the joint life expectancy of the IRA owner and his beneficiary. Because your estate has no life expectancy, there is no way to stretch out the period during which your IRA assets can remain inside your IRA and grow tax-deferred even if this is what your IRA beneficiaries want. Thus, if you die prior to age 70 1/2 , naming your estate as your beneficiary, the assets held in your IRA will have to be liquidated and proceeds disbursed over a five-year period to the beneficiaries you named in your will. If your IRA was a traditional IRA, your beneficiaries will have to include every IRA disbursement in their taxable income for the year during which the disbursement was received. If your IRA was a Roth IRA, your beneficiaries won't owe any income tax on your IRA disbursements, but they will still be forced to withdraw your IRA assets by the end of the five-year period, whereas they could have kept your IRA assets inside of your IRA for many more years if you had named specific beneficiaries for your IRA. If you die after age 70 1/2 , naming your estate as your beneficiary, your IRA beneficiaries will have to take annual minimum distributions from your IRA that are based on what the federal government's actuaries have determined would have been your remaining life expectancy if you were still alive, reduced by one for each year thereafter. From a financial planning viewpoint, the biggest disadvantage of naming your estate as the beneficiary of your IRA is the basic inability to stretch out the distributions from your IRA to maximize the buildup of value and delay the payment of income taxes, as described above.

Stephanie G. Bigwood, CFP, ChFC, CSA, Assistant Vice President, Lombard Securities, Incorporated, Baltimore, MD
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

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.)

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.

Individual Retirement Arrangement (IRA)

An individual retirement arrangement is a trust set up to receive retirement contributions of individuals. The arrangement may be in the form of an individual retirement account or individual retirement annuity. The amount that may be contributed is limited. Amounts earned in the IRA are not taxed until they are withdrawn.
Copyright © 2008 H&R Block. All Rights Reserved. Reproduced with permission from H&R Block Glossary
References in periodicals archive ?
Higgins' trip -- on his country's first state visit to Britain since Ireland won independence nearly a century ago -- underscores how much the success of Northern Ireland peacemaking has transformed wider relations between the two longtime adversaries since the 1990s, when Irish Republican Army car bombs were still detonating in London.
Tom Glennon was a young officer in the Irish Republican Army in the 1920s.
A dissident republican group calling itself the "New IRA" (Irish Republican Army) claimed responsibility for the attack.
They also said the discovery of the bomb factories drew parallels with the activities of the Irish Republican Army, which waged a war against British rule.
London, July 13 ( ANI ): The London Olympics is at risk from a terror attack by the Irish Republican Army (IRA) group, according to Britain's Intelligence.ccording to The Sun, Britain's Intelligence and Security Committee said that spy agencies are under 'unprecedented pressure' to prevent any kind of terror threat by republican hardliners and Al-Qaeda groups.
DUBLIN, IRELAND * Police agreed to stop an investigation into a Catholic priest suspected in a 1972 Irish Republican Army bombing in Northern Ireland after government officers and church leaders "colluded" to protect him, a Police Ombudsman report revealed Aug.
Police said callers using recognised Irish Republican Army code words rang a local hospital and local businesses before ramming the car bomb into the security gates of the courthouse.
Likened to Victorian author Charles Dickens for his deft treatment of social issues and hailed for daring to tackle ideologically complex issues including the Spanish Civil War ("Land and Freedom") and the birth of terrorist group the Irish Republican Army ("The Wind That Shakes the Barley"), Loach has earned a devoted following on the continent.
MEMORIAL Members of the Royal Marine Portsmouth band play during a concert on Deal seafront in Kent yesterday, as thousands of people turned out to mark the 20th anniversary of the deaths of 11 Royal Marines musicians who were killed when an Irish Republican Army bomb exploded at their barracks in the south coast town.
THE Real IRA was formed in 1997 after a split in the Provisional Irish Republican Army.
A story of unraveling the mysteries of Atlantis, with the blend containing rebel Irish Republican army leaders, Jersey mobsters, and more, author Mike Breslin has written a unique tale that is certain to please readers looking for originality.
1974: The Irish Republican Army (IRA) were outlawed in all of Great Britain, including Northern Ireland.

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