An individual retirement account is a tax-favored retirement savings plan that individuals can establish themselves.

Question

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This is a true statement. An individual retirement account (IRA) is a type of retirement savings plan that individuals can open and contribute to on their own, as opposed to a plan offered by an employer. It allows individuals to save and invest money on a tax-deferred basis, meaning they do not pay taxes on the money they contribute until they withdraw it in retirement.

An Individual Retirement Account Is a Tax-Favored Retirement Savings Plan