An IRA, also known as an Individual Retirement Account, is a savings vehicle that provides tax breaks for those who wish to save for retirement. This type of account can offer tax-free savings or tax-deferred. There are a number of different vehicles that fit this classification. A traditional IRA allows up to $4,000 a year in contributions. The amount allowed increases after the age of 50. Money placed in this type of account cannot be withdrawn until a set retirement age. Early withdrawals are subject to penalties.