Home > Glossary > Individual Retirement Arrangement (IRA)

Meaning / Definition of

Individual Retirement Arrangement (IRA)

Categories: Finance,

An individual retirement arrangement (IRA), which may be set up as either an account or an annuity, allows people with earned income to contribute to a tax-deferred traditional ira or a tax-free roth ira.Your contribution is a portion of your earnings, up to an annual cap, though it can't be more than you earn. The cap is $4,000 for 2006 and 2007, and $5,000 for 2008. If you are 50 or older, you can make an additional catch-up contribution of $1,000 a year.If you open a traditional ira, you usually can't withdraw without penalty before you turn 59 1/2 and you must begin minimum required distributions (MRDs) by April 1 of the year following the year you turn 70 1/2. income taxes figured at your regular rate are due on your earnings and on any contributions you deducted on your tax return in the year you made them.If you qualify for a roth ira because your modified adjusted gross income is less than the ceiling for your filing status, you make after-tax contributions but your withdrawals are free of federal income tax provided you're at least 59 1/2 and your account has been open at least five years. There are no required withdrawals from roth iras.

Featured term of the day

Definition / Meaning of

Fast Market

Categories: Stocks, Economics,

A fast market is one with heavy trading and rapidly changing prices in some but not necessarily all of the securities listed on an exchange or market.In this volatile environment, which might be triggered by events such as an initial public offering (IPO) that attracts an unusually high level of attention or an unexpectedly negative earnings report, the rush of business may substantially delay execution times. The probable result is that you end up paying much more or selling for much less than you anticipated if you gave a market or stop order.While choosing not to trade in a fast market is one way to reduce your risk, you might also protect yourself while seeking potential profit by giving your broker limit or stop-limit orders. That way, you have the possibility of buying or selling within a price range that's acceptable to you, but are less exposed to the frenzy of the marketplace.The term fast market is also used to describe a marketplace - typically an electronic one - where trades are executed rapidly.

Most popular terms

1. Collateralized Mortgage Obligation (CMO)
2. Statute Of Limitations
3. Flexible Spending Account
4. Mortgage (mortgagee) Clause
5. Immigration Violation Coverage Endorsement
6. Concurrent Causation
7. Relative Strength
8. Return
9. Tax Exempt
10. Covenant Not To Sue

Search a term

Keyword:

Browse by alphabet

ABCDEFG
HIJKLMN
OPQRSTU
VWXYZ#

Browse by category

Accounting
Banking
Bankruptcy Assistance
Bonds and Treasuries
Brokerages
Business and Management
Compliance and Governance
Credit and Debt
E-commerce
Economics
Estate Planning
Forex
Fraud
Fundamental Analysis
Futures
Global
Insurance
International Trade
Investing and Trading
Ipos
Legal
Loan and Mortgage
Mergers and Acquisitions
Mutual Funds
Operation and Production
Options
Patent
Personnel Management
Real Estate
Retirement and Pension
Statistics and Risk Management
Stocks
Strategies
Tax
Technical Analysis
Venture Capital