IRA - Individual Retirement Account
An IRA is a retirement account that shares similar tax advantages as 401(k) and 403(b) plans but is established by an individual taxpayer. That means we can open up an IRA with a bank or brokerage and begin transferring money on our own.
Some IRA’s are self-directed which means that we have full control over a broad array of investment options and we can make all of the investment decisions.
There are also robo advisor firms, such as Wealthfront and Betterment, that offer more passive investment options. These companies will invest our deposits in a portfolio and manage the account for us at a small fee.
Even if we have a 401(k) or 403(b), we can still open and contribute to an IRA in addition to what we are contributing to our 401(k) or 403(b).