• See Individual Retirement Account.
• Is the Individual Retirement Account. It provides a tax advantaged investment vehicle for individuals to save for retirement. The popularity of the program has lead to variations of this plan. These include the College IRA and the Roth IRA.
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| ||Individual retirement account|
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| ||After tax: Describes funds on which an employee has already paid all income taxes, for example, amounts held outside a 401(k) plan or traditional Ira, or within a Roth IRA. Taxes on benefits derived from these funds, plus investment earnings in a Roth IRA, are not payable when they are received. See basis. Also known as post-tax.|
| ||Before tax: Describes funds on which the employee has not yet paid income taxes, for example, amounts held in a qualified plan or traditional Ira. Taxes have been deferred, not waived, and are normally due when funds are paid out from the qualified plan or IRA. Also known as pre-tax.|
| ||Defined contribution plan: Refers to a retirement plan that has a quantified amount to be invested each year. Depending on the plan, there may be maximum and minimum contributory dollar amounts. Also, there may be years-of-employment and income constraints. Some popular plans are the 401K and Ira plans. Here, there are no guarantees as to eventual value of plan amount or plan benefits. Poor, moderate, or better than average investment performance directly impacts the value of the account and potential benefits. Compare to Defined Benefit Plan.An employer pension plan with benefits based on formulas that recognize the individual s years of service and other factors such as pay.A pension plan in which the sponsor is responsible only for making specified contributions into the plan on behalf of qualifying participants. Related: defined benefit plan|
| ||Early distribution: Payment of benefits from a qualified plan or Ira to an individual who has not reached age 59 , except as permitted by IRS rules, resulting in an excise tax.|
| ||Individual retirement account: Abbreviated Ira. A retirement investing tool for employed individuals that allows for an annual contribution of 100% of earned income up to a maximum of $2,000. Some or all of the contribution may be deductible from current taxes, depending on the individual's adjusted gross income and coverage by employer-sponsored qualified retirement plans. Withdrawals of tax deferred contributions are taxed as income, including the capital gains. See also: Keogh Plan; Roth IRA.Abbreviated Ira. A retirement savings vehicle for individual workers. Traditional IRAs allow tax-deductible contributions, with earnings tax deferred until withdrawal, subject to minimum distribution rules; contributions to Roth IRAs are made with after-tax funds, and withdrawals are tax-free.|
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| ||Rollover ira|