Definition of Individual Retirement Account (IRA)

An Individual Retirement Account is a tax-advantaged investment vehicle designed to help individuals save for retirement. IRAs can be used to invest in various asset classes, including real estate, stocks, bonds, and mutual funds. Contributions to certain types of IRAs may be tax-deductible, and the earnings within the account grow tax-deferred until withdrawal.

IRAs play a significant role in retirement planning and can be utilized as a tool for investing in real estate, such as rental properties or real estate investment trusts (REITs).

Related Real Estate Terminology

• Roth IRA
• Traditional IRA
• Self-Directed IRA
• Real Estate Investment Trust (REIT)
• 401(k)
• SEP IRA
• SIMPLE IRA
• Tax-deferred growth
• Required Minimum Distribution (RMD)
• Early withdrawal penalty

References

1. Internal Revenue Service. (2021). Individual Retirement Arrangements (IRAs). Link
2. Investopedia. (2021). Using Your IRA to Invest in Real Estate. Link