Individual Retirement Accounts (IRAs)

Individual Retirement Accounts (IRAs) function as personal, tax-qualified retirement savings plans.

Anyone who works in 2005, whether as an employee or self-employed person, can set aside up to $4,000 for the year in an IRA ($4,500 if age 50 or older), and the earnings on these investments grow, tax-deferred, until the eventual date of distribution. Moreover, certain individuals are permitted to deduct all or part of their contributions to the IRA. As an alternative option, you may be able to set up a "Roth IRA," contributions to which are not deductible, but from which withdrawals at retirement won't be taxed.