Individual Retirement Accounts Defined

Definition of individual retirement accounts / how are individual retirement accounts defined?

Individual retirement accounts are defined as investment accounts set up by individuals for retirement. Individual retirement accounts are defined by their tax deferral benefits. Individuals use individual retirement accounts to supplement their other retirement savings such as 401k, 403b, pension plans and other savings.

Individual retirement accounts are also referred to as IRA for short. Aside the broad definition of Individual retirement accounts, individual retirement accounts are defined by their tax deferral benefits and eligibility into

• Traditional Individual retirement accounts
• Roth Individual retirement accounts
• SEP Individual retirement accounts, and
• SIMPLE Individual retirement accounts

Traditional Individual retirement accounts and Roth Individual retirement accounts are the most popular. SEP Individual retirement accounts are for businesses and business owners. Each type of Individual retirement accounts is defined further by:

• their contribution limits,
• tax treatment of contribution, and
• withdrawal rules.