Definition
A retirement account you open yourself at any brokerage, independent of any employer. Traditional contributions may be tax-deductible; Roth contributions are after-tax with tax-free growth. Annual limits are well below 401(k) limits.
Why it matters
The IRA is retirement saving with no employer required: freelancers, job-changers, and anyone with a weak 401(k) menu get full control and better fund choices at any brokerage.
Example
A freelancer with no workplace plan automates a monthly IRA contribution into a target-date fund. At tax time they choose the traditional deduction now or the Roth's tax-free growth later, depending on the year's income.
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.