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. Traditional IRA

    An individual retirement account (IRA) that allows individuals ...
  6. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...
RELATED FAQS
  1. Why should I open an IRA?

    When planning for retirement, many people fall back on the qualified retirement plans offered through their employers, typically ... Read Full Answer >>
  2. Where can I open an IRA?

    An individual retirement account can be opened through a range of major financial institutions, including brokerage firms ... Read Full Answer >>
  3. Who is eligible to open an IRA?

    Single or married individuals under the age of 70.5 who have received taxable income during a 12-month period are eligible ... Read Full Answer >>
  4. What is the difference between a 408 (k) plan and a 401 (k) plan?

    Both 408(k) and 401(k) plans are retirement plans sponsored by an employer. They allow employees to set aside a portion of ... Read Full Answer >>
  5. If I contribute to a 401(k) plan, can I still contribute to an individual retirement ...

    Depending on your income, contributing to a 401(k) can limit your ability to contribute to an individual retirement account ... Read Full Answer >>
  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 ... Read Full Answer >>
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  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

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    Retired from your job but still want to work? Here's how to turn your skills and know-how into a new freelancing career.
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