Business and Personal Finance Dictionary

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• INDIVIDUAL RETIREMENT ARRANGEMENT
  
  Also known as Individual Retirement Account. A type of savings account for retirement. Some IRA options are: 1. Deductible Traditional IRA: Special tax rules allow you to reduce your taxable income by your qualified contributions to your IRA. You pay tax when you make withdrawals from your IRA. 2. Nondeductible Traditional IRA: Although you cannot reduce your income by the amount of your current nondeductible contributions, you do not pay tax on the earnings of your account until you make withdrawals. 3. Roth IRA: You cannot deduct current contributions to a Roth IRA, but when you make qualified withdrawals from your account, you will not be taxed on the withdrawals.
  
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