Individual Retirement Account
A personal retirement savings plan available in the US. There are two types of IRA:
- Traditional – No taxes are paid on the contributions or any changes in the market value of the investments in the account until the money is withdrawn. That is, the contributions are deducted from your salary in the year they are made.
- Roth – There is no tax deduction when contributions are made, but no taxes are paid on any changes in the market value of the investments in the account or when the money is withdrawn from the account.