In the United States, an IRA is an Individual Retirement Arrangement, a tax-deferred retirement account.
Taxpayers are generally allowed to deduct contributions to the IRA from their income taxes in the year they are made, up to some government determined limit. Earnings are not subject to ongoing taxes. During retirement, withdrawals from the account are taxed as regular income. This type of IRA is sometimes referred to as a "Traditional IRA" to contrast with the newer "Roth IRA".
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