In the United States, an individual retirement arrangement, more commonly known as an IRA, is a retirement savings vehicle that allows people to set aside money for retirement on a tax-deferred basis. It is designed to incentivize people to save for retirement and provide them with more flexibility than a 401(k) or other employer-sponsored retirement plan. An IRA allows people to put money aside for retirement before taxes, making it a great way to boost retirement savings.

When people contribute to an IRA, their contributions and any earnings from investments that are held in that account are allowed to grow tax-deferred. This means that the owner can deduct their contributions from their income tax, so they are not taxed until they begin taking money out of their IRA. The tax-deferral helps the IRA grow faster and better positions the owner to save for retirement when the funds are needed.

What makes the IRA attractive is its flexibility. You can invest in a variety of investments, including stocks, mutual funds, ETFs, and even some alternative investments. You can also allocate your investments between types of securities, giving you more control over how much you want to invest in each type of investment. Additionally, with an IRA, you can open multiple accounts, so you can diversify your investments more easily.

An IRA can also be used to self-direct investments in real estate, private businesses, and more. This can help give people the flexibility to invest in more nontraditional asset classes. However, these types of investments come with additional complexities, so it's important to understand the risks and know the rules before pursuing any type of real estate or business investment with an IRA.

When it comes time for retirement, an IRA has multiple options for distributions. The owner can choose to take lump-sum distributions, start taking regular periodic payments, or roll their entire IRA into an annuity.

Overall, an IRA is a great way to save for retirement, giving people the flexibility to invest in a variety of assets and giving them tax-deferred growth. It's important to understand the rules and potential risks of investing before getting started, but an IRA can provide a great way to bolster retirement savings.