What Is an Individual Retirement Account?

An individual retirement account is an IRA account that anyone with a working income in the United States can open, regardless of whether they participate in another retirement plan. Pre-tax payment limit: $ 2,000 per year for individuals, $ 2,250 for the taxpayer and his unemployed spouse, or $ 4,000 if both have work. As a result, taxes are reduced every year when payments are made, and before withdrawals, these payments increase at compound interest (possibly high interest rates). Withdrawal is subject to ordinary income tax, but may also be calculated at a reduced marginal tax rate. ^[1]