Letter: I

Individual Retirement Account. IRAs are personal retirement plans that allow you to select your own investments and make elective contributions (up to certain annual limits). Unlike 401(k) plans, IRAs are not sponsored by employers.

Traditional IRA. Like 401(k) plans, traditional IRAs offer tax-deferred savings for retirement; annual contributions and earnings are not taxed until you withdraw the money. IRA contributions may be tax-deductible depending on your income, tax-filing status and other factors.

Roth IRA. An Individual Retirement Account that allows you to withdraw the money tax-free at retirement. Contributions are not tax-deductible, but your money grows tax-free and you won’t ever pay taxes on the earnings. To qualify to contribute to a Roth IRA, your income must be less than the limits set by federal law.

Rollover IRA. An Individual Retirement Account that holds money transferred from a 401(k) account.

The selection of investment choices offered by your 401(k) plan. Most plans offer a menu of mutual funds, including stock funds, bond funds, and money market funds. Your plan may also offer company stock or a brokerage window account.

Money that is put at risk for the purpose of making a future profit. There are many types of investments, but the most common are stocks, bonds, mutual funds, and real estate. Your 401(k) plan will offer a menu of investment choices, which usually include stock and bond mutual funds, money market funds, and your company’s stock.