Individual Retirement Account (IRA)

What is an Individual Retirement Account (IRA)?

An Individual Retirement Account, or IRA, is the name given to a specific type of retirement account by the government. There are two main types of IRAs: a Traditional IRA and a Roth IRA (there are others as well).

• A Traditional IRA is a pre-tax retirement account; saving money with this account lowers your gross income (and thus your taxes) today and you pay taxes when you withdraw funds in retirement.
• A Roth IRA is a post-tax retirement account; saving money with this account means you pay taxes today (you invest after-tax dollars) but you never pay taxes on the money again no matter how large your nest egg grows.