IRA stands for Individual Retirement Account, which is a savings account with large tax breaks, according to CNN Money. There are different types of IRAs such as ROTH IRAs, SEP IRAs, SIMPLE IRAs and traditional IRAs with each having different restrictions and caps on contributions.
Individual Retirement Accounts can be opened at almost any large financial institution like mutual fund companies, banks and brokerage firms. Anyone under 70.5 years of age who earns a taxable income can contribute to a traditional IRA, notes CNN Money. It is best to put the most money the government allows into an IRA account because its tax deductible. The contribution limit into an IRA is whichever is smaller, $5,000 or the total of your taxable compensation.