An Individual Retirement Account (IRA) is an account that allows you to save for your retirement and take advantage of tax benefits.
|At a glance: Types of IRAs
- May have more choices and lower fees than a 401(k).
- No taxes or withdrawal penalties at time of transfer.
- Funds can continue to grow tax-advantaged.
- Contributions may be tax-deductible.
- Withdrawals are taxed as current income during retirement.
- No income limitations.
- Contributions are not tax-deductible.
- Withdrawals are generally tax- and penalty-free after 5 years and after age 59½.
- Income eligibility limitations.
- For children under age 18 who have earned income.
- Can be a Traditional or Roth IRA.
- Funds can be used to pay for college.
- For those who inherit a non-spousal Traditional or Roth IRA.
- Tax-deductible contributions or IRA conversions aren’t allowed.
- Annual distributions are required.