INDIVIDUAL RETIREMENT ACCOUNT
A means by which an individual can receive certain federal tax advantages while investing for retirement.
The federal government has several reasons
for encouraging individuals to save money for
their retirement. For one, the average life span of
a U.S. citizen continues to increase. Assuming
that the average age of retirement does not
change, workers who retire face more years of
retirement and more years to live without a wage
or salary.
Uncertainty over the future of the federal
SOCIAL SECURITY system is another reason.
U.S. workers generally contribute deductions
from their paychecks to the Social Security
fund. In theory, this money will come back to
them, usually upon their retirement. But a sub-
stantial number of politicians, economists, and
scholars contend that the Social Security fund
is being drained faster than it is being filled,
and that it will go broke in a number of years,
leaving retirees to survive without government
assistance.
Regardless of its future, many people con-
sider the retirement benefits of Social Security to
be inadequate, and they look for other methods
of funding their retirement years.Many employ-
ers offer retirement plans. These plans vary in
form but generally offer retirement funds that
grow with continued employment. Yet this ben-
efit is not always available to workers. A chang-
ing economy has caused some employers to cut
