Who has an ira account? what are they all about?

Question

Who has an ira account? what are they all about?

Answer 1

IRA account is a private pension.  The money grows tax free. So more money means more interest.  Think of it as a basket and in that basket you can put stocks and mutual funds. When you turn 59 1/2 you may start withdrawing a monthly check.  Federal Taxes are with held and you are responsible to paying the state tax.

Answer 2

Heck, I have 3.  They are accounts created by acts of congress to allow people to save for retirement and either defer taxes on the amounts deposited and earned as in the case of a traditional IRA account or to completely eliminate taxes on the amount earned in the account as in the case of a Roth IRA account.  As of this year one can deposit up to $5000 a year into the account with certain high income exceptions provided one has that much earned income--wages.  The account can be established with either a bank or mutual fund or stock broker and possibly others.  An interesting twist is that you have up until April 15 of the following year to deposit funds into the account for the preceeding year.  

There is one catch to the IRA accounts.  You can not withdraw funds without a penalty before age 59 1/2.  The penalty is 10% plus taxes, I believe.