Individual Retirement Account (IRA) Individual Retirement Account (IRA)
A method of planning for retirement that enables individuals to save up to $2,000 annually. These funds, called contributions, are in addition to any retirement plan already in place by the individual's employer. In addition, if an individual's employer has adopted a Savings Incentive Match Plan for Employees, the employee will be able to make a pre-tax elective contribution to an IRA of up to $6,000 annually. IRA funds are tax-deferred for those who meet certain income requirements and who do not participate in a 401(k). For these individuals, these funds are not subject to tax until withdrawals are made, when the individual may be in a lower tax bracket.
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