An individual retirement account is a savings account with tax advantages that individuals can open to save and invest in the long term.
An IRA is designed to encourage people to save for retirement. Anyone who has earned income can open an IRA and enjoy the tax benefits these accounts offer.
You can open an IRA through a bank, an investment company, an online brokerage, or a personal broker. IRAs are retirement savings accounts with tax advantages.
Money held in an IRA usually can't be withdrawn before age 59½ without incurring a hefty tax penalty of 10% of the amount withdrawn.
There are annual income limitations for deducting contributions to traditional IRAs and for contributing to Roth IRAs.