Individual Retirement Account

Individual Retirement Account (IRA) - Created by Congress in 1974 to benefit individuals that were not covered by an employment based retirement plan such as a pension.  An IRA an investment mechanism for tax-deferred retirement saving that is under the control of individuals, not employers.  Individual Retirement Accounts generally take on two forms:

• Traditional IRA - an individual retirement account that accepts tax deductible contributions distributions from the account are taxable.
• Roth IRA - an individual retirement account to which nondeductible contributions are made, but withdrawals are tax-exempt.