An Individual Retirement Account (IRA) is a tax-advantaged savings vehicle in which contributions and withdrawals are either tax-deferred or tax-free. Investment options include stocks, bonds, and mutual funds. Deductibility depends on a single investor or couple’s (if filing jointly)adjusted gross income.
Upon retirement, 401k savings are often rolled over into an IRA for more control by the owner. Specific types of IRAs include traditional, Roth, SEP IRAs, and SIMPLE IRAs. The amount that is allowed to be placed in an IRA is reviewed annually and routinely increased to keep pace with inflation and other factors.