2006-11-09 09:52:28 · 2 answers · asked by thù tỉ tỉ 4 in Business & Finance ➔ Careers & Employment
It's an Individual Retirement Account. This is a way for you to fund a retirement account for yourself while receiving tax benefits for doing so. The limit you can put in in 2006 was $4,000 (as long as your income is below $100,000 as an individual and you are under 50 years old.)
You can get two basic types of IRA:
1. Traditional - you can contribute $4,000 every year and take it as a deduction off your taxes. But when you retire you will have to pay income tax on the amount that you take out of it.
2. Roth IRA - you contribute with money after taxes (no deductions), but when you retire you can take the money out without paying any income tax on it.
It's a great investment that everyone should make if they can. Either to get the tax deduction now or to have a chunk of change to retire on tax free. There are penalties for taking money out of your IRA before retirement age, so you should look into that at the time.
Once you have the IRA account, you can invest the money within it in just about anything you can invest regular money in, stocks, bonds, CDs, money markets, mutual funds. Capital gains made in an IRA are not taxable.
2006-11-09 10:06:31 · answer #1 · answered by braennvin2 5 · 0⤊ 0⤋
It is an individual retirement account and gets taxes deferred on deposits up to a certain amount.
2006-11-09 10:02:27 · answer #2 · answered by rhymingron 6 · 0⤊ 0⤋