The article may contain affiliate links from partners. The words, opinions, and reviews are our own. Learn how we make money to support our financial wellness mission.

An Individual Retirement Account or IRA is an investment with specific tax advantages. A traditional IRA defers taxes on earnings until withdrawal and, under certain circumstances, allows the deduction of some contributions from current taxable income. A Roth IRA requires after-tax contributions only but allows tax-free withdrawals under certain rules.

It’s a retirement savings program for individuals to which yearly tax-deductible contributions up to a specified limit can be made. With traditional IRAs, the amount contributed is not taxed until withdrawn. Withdrawal is not permitted without a penalty until the individual reaches age 59 1/2.

Main Menu