IRA Plan

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.

BREAKING DOWN '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.

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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. 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 >>
  3. 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 >>
  4. 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 >>
  5. 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 >>
  6. Am I losing the right to collect spousal Social Security benefits before I collect ...

    The short answer is yes, if you haven't reached age 62 by December 31, 2015. The Bipartisan Budget Act of 2015 disrupted ... Read Full Answer >>
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