A few months back we discussed saving for retirement through a 401k (and a few months before that, we talked about why saving why retirement as early as possible is a good idea!). I promised to address the other way most people save for retirement – IRAs – and now I’m here to deliver! Question and answer seemed to work last time, so we’ll try it again :) What is an IRA? An IRA, or Individual Retirement Account, allows you to save money for retirement with tax advantages. The account is held at a financial institution, not through your employer. There are two main types of IRAs – Traditional and Roth – and they have different advantages. What is a Traditional IRA? In a Traditional IRA, you’re able to deduct your yearly contribution from your taxable income (reducing the amount of money you have to pay taxes on – yahoo!). Ideally, the money will build up over time, and then in retirement, you’ll pay income taxes on it when you take it out. Many people find themselves in a lower tax bracket when they retire, since they’re not making a salary, so their withdrawals might be taxed at a lower rate than it would have been earlier in life. Tax benefits today, taxes when you withdraw. What is a Roth IRA? In a Roth IRA, you pay tax on your income as usual, then contribute to your IRA. Then, your money grows tax-free, and you can withdraw it tax-free in retirement (assuming you retire after age 59 1/2). Taxes when you contribute, no taxes when you withdraw. Why save in an IRA instead of another type of account? Great question! First, if your employer offers a 401k, and especially if they offer a match, max out your match first! (Don’t