Dictionary of Finance and Investment Terms: Individual Retirement Arrangement (or Account) (IRA)
Individual Retirement Arrangement (or Account) (IRA)
personal, tax-deferred, retirement account that an employed person can set up with a deposit limited to $4,000 per year ($8,000 for a married couple filing jointly, whether or not both spouses work). Under the Economic Growth and Tax Relief Reconciliation Act of 2001, these limits are scheduled to rise to $5,000 per person in 2008. For those over age 50, additional catch-up contributions of $1,000 are allowed, meaning an annual contribution limit of $5,000.
IRAs can be invested in almost every kind of instrument including stocks, bonds, mutual funds, certificates of deposit, annuities, real estate, and precious metals.
