IRA Plan

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DEFINITION of 'IRA Plan'

A plan that individuals may establish to arrange and plan for retirement. Generally, an IRA plan allows you to save money and defer taxes until you retire. IRA plans have annual contribution limits that are established by the government and rise gradually with inflation; individuals age 50 and older can make slightly higher "catch-up" contributions.

INVESTOPEDIA EXPLAINS 'IRA Plan'

Individual retirement account plans come in several forms: the traditional IRA and the Roth IRA for individuals, and the SEP IRA and the SIMPLE IRA for the self-employed (self-employed individuals may still use traditional or Roth IRAs). Each plan has different rules regarding taxation and withdrawals. The tax advantages of these types of accounts make them valuable as retirement savings tools.

RELATED TERMS
  1. IRA Transfer

    The transfer of funds from an Individual Retirement Account (IRA) ...
  2. Simplified Employee Pension - SEP ...

    A retirement plan that an employer or self-employed individuals ...
  3. Roth IRA

    An individual retirement plan that bears many similarities to ...
  4. Extended IRA

    An IRA that allows a second generation beneficiary to continue ...
  5. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...
  6. Traditional IRA

    An individual retirement account (IRA) that allows individuals ...
RELATED FAQS
  1. Why should I open an IRA?

    Understand the benefits of an IRA, how it enables you to increase retirement savings and how funds can be used before retirement ...
  2. Where can I open an IRA?

    Open an IRA through brokerage firms, mutual funds, banks and other major financial institutions, or through large Internet ...
  3. Who is eligible to open an IRA?

    Individuals employed by an employer are eligible to open a traditional IRA if they receive bonuses, wages, commissions and ...
  4. What is the difference between a 408 (k) plan and a 401 (k) plan?

    Learn key differences between 401(k) and 408(k) plans. Employers provide different options to help employees save for retirement, ...
  5. If I contribute to a 401(k) plan, can I still contribute to an individual retirement ...

    Participating in your employer's 401K plan can reduce or prohibit IRA contributions for your family depending on your spouse's ...
  6. Is it wise to put an IRA account into a fixed or variable annuity?

    The answer to this depends on an individual's investment goals, requirements and risk tolerance. During the 1990s, the majority ...
Related Articles
  1. Taxes

    Tax Treatment Of Roth IRA Distributions

    Learn the requirements for withdrawing funds tax and penalty free.
  2. Retirement

    Traditional IRA Deductibility Limits

    Find out where you can take a tax deduction on the contributions you make.
  3. Taxes

    Tax Treatment Of Ineligible IRA Rollovers

    Eager to save for retirement? Learn how to avoid overpayment penalties.
  4. Taxes

    How To Correct Ineligible (Excess) IRA Contributions

    Eager to save for retirement? Learn how to avoid overpayment penalties.
  5. Taxes

    An Introduction To Correcting Ineligible IRA Contributions

    Eager to save for retirement? Find out how to avoid overpayment penalties.
  6. Retirement

    Making Spousal IRA Contributions

    Eligibility requirements, contribution limits and tax deductions all change with one little ring.
  7. Retirement

    Roth Vs. Traditional IRA: Which Is Right For You?

    To answer this question, you need to consider several of the factors we outline here.
  8. Retirement

    Did Your Roth IRA Conversion Pass or Fail?

    If you are moving assets from a Traditional IRA to a Roth IRA, you need to know the associated tax rules.
  9. Retirement

    Strategies To Build Your Retirement Portfolio

    Retirement indexes are designed to estimate how much an investor would need to have saved today to generate annual income in retirement, starting at 65.
  10. Retirement

    Tapping Retirement Funds Early – Without A Penalty

    The IRS offers several ways to skirt the 10% penalty on early retirement distributions.

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