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Ways to Enhance Taxpayers' Comprehension of Individual Retirement Arrangements.

Terms to help taxpayers better understand Individual Retirement Arrangements Many taxpayers may have heard of Individual Retirement Arrangements, or IRAs, but some don't know how IRAs help them save for retirement. People can set up an IRA with a bank or other financial institution, a life insurance company, mutual fund or stockbroker. Here's a list of basic terms to help people better understand their IRA options. Contribution. The money that someone puts into their IRA. There are annual limits to contributions depending on their age and the type of IRA. Distribution. The amount that someone withdraws from their IRA. Required distribution. There are requirements for withdrawing from an IRA: Someone generally must start taking withdrawals from their IRA when they reach age 70½. Per the 2019 SECURE Act, if a person's 70th birthday is on or after July 1, 2019, they do not have to take withdrawals until age 72. Special distribution rules apply for IRA benefic