What is an IRA?

An IRA is an individual retirement arrangement, which can be an individual retirement account or an individual retirement annuity. It is a personal savings plan that allows you to set aside money for retirement with tax advantages.

There are two primary types of IRAs: Traditional and Roth. Depending on which one you choose, you will be able to take advantage of tax-deferred earnings, and you may be able to deduct some or all of your contributions or take advantage of tax-free distributions. You also may be eligible for a tax credit equal to a percentage of your contribution.