Individual retirement accounts (more formally known as “Individual Retirement Arrangements”), or IRAs, are a method for saving money for retirement that is either tax-free or tax-sheltered (or arranged to minimize tax liability). There are several types of IRAs. Each comes with its own benefits, rules, and contribution limits.
If you set up your IRA through a brokerage firm, you’re able to invest your funds in stocks, bonds, mutual funds, real estate, and various other government-approved asset classes. Let’s cover the different types of IRAs and their fundamentals.