An Individual Retirement Account (IRA) is a US-based tax-advantaged personal savings vehicle designed to encourage retirement savings by providing specific tax benefits — either on contributions (Traditional IRA) or on withdrawals (Roth IRA). Traditional IRAs allow pre-tax contributions that grow tax-deferred until withdrawal, while Roth IRAs are funded with after-tax dollars but allow tax-free withdrawals in retirement. IRAs are widely used in the US alongside employer-sponsored 401(k) plans to build long-term retirement wealth. For Indian investors with US residency, NRI status, or global investment exposure, understanding IRA mechanics is essential for cross-border financial planning, especially when managing retirement assets across multiple tax jurisdictions.
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