While employer-provided plans are a key component of the U.S. retirement savings system, they are not the only tax-advantaged option available to investors. In this chapter, we look at two other retirement savings vehicles: the individual retirement account, or IRA (spelled out or spoken like the man's name) and variable annuities. Since both are sold to individuals, they are considered part of either the intermediary or direct distribution channel, unlike 401(k)s and other employer-sponsored plans. (The definitions of the distribution channels are in Chapter 11.)
After looking at these options, we then take a step back to examine some of the bigger picture issues affecting the overall retirement savings system.
Specifically, this chapter reviews:
Before you read on, please note that we assume throughout this discussion that you are familiar with retirement plan terminology. If that's not the case, you might want to read Chapter 12 on 401(k) plans first.
If the growth in defined contribution plans has been amazing, the growth in individual retirement accounts—often referred to as IRAS—has ...