What Does “IRA” Mean?

Here’s a post in which you can impress your friends with your knowledge (or annoy them with your smug know-it-all-ness).

Ask them what does IRA stand for? They’ll probably say “Individual Retirement Account.”

Then you can tell them that they’re correct. Then you can really impress/annoy your friends when you tell them that, according to the Internal Revenue Service’s Publication 590, IRA stands for “Individual Retirement Arrangement.”

I recently heard a financial advisor speak about IRAs, and that was what he told us.

Just before I wrote this, I called my stepfather, who made a career preparing individuals’ tax returns. I asked him what IRA meant and he said, Individual Retirement Act before quickly changing his answer to Individual Retirement Account.

When I told him about Publication 590, he said, “Well, it was always called ‘account.’ I don’t known if they bastardized it.”

After calling him, I checked the “ever-reliable” Wikipedia. It said the A stood for Account, which is a form of individual retirement plan. Then it mentions Publication 590 before saying that IRA “is used to describe both individual retirement accounts and the broader category of individual retirement arrangements.” It also mentions an individual retirement annuity.

Obviously, IRA means many things to many people.

To me, it’s my brother’s middle name.

Until next time! Use the right words!

leebarnathan.com