Coming at you today with another batch of common investment terms! We’re moving on from mutual funds and looking at retirement and education terms. We’re lumping retirement and education terms together because these types of investments share many similarities. For both investments, it is frequently possible to make pre-tax contributions and/or take tax-free distributions.

Individual Retirement Account (IRA): An account held by an individual to maintain and invest funds for retirement. Depending on the type of account, either the contributions to the account are tax-deductible or the earnings are tax-free.

Keogh: This is a plan very similar to a 401k, only it is for self-employed individuals, partners, and owners of unincorporated businesses. It is sometimes referred to as an H.R. 10 plan. 

Qualified retirement plan: These are plans that are acknowledged and authorized by the IRS and required to follow specific rules and regulations. Participants may accumulate money in these accounts on a tax-deferred basis. IRAs and 401(k)s are examples of qualified retirement plans.

Thanks for reading through another round of terms! As always, reach out to us with any questions.

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