The Individual Retirement Accounts ( IRA’s ) are tax-advantaged accounts that individuals can establish to accumulate funds for retirement. It is depending on the types of IRAs, contributions may be made on a pre-tax or post-tax basis and investment earnings are either tax-deferred or tax-free.
In other words, we can say that:
An individual retirement account is a tax benefitted tool through which individuals can reserve their funds for retirement savings But its major drawback is that it imposed a penalty when an individual withdraws before the age of 59 ½.