retirement account

Meaning

1. 1nouncountablefinance

   A savings or investment account set up to build money for later life, usually with tax benefits and limits on early withdrawal.

   Grammar: Takes an or the: she opened a retirement account.

   Patterns

   • contribute to a retirement account
   • withdraw from a retirement account

   I put ten percent of every paycheck into my retirement account.

   He opened a retirement account as soon as he got his first full-time job.

   Taking money out of a retirement account early can trigger a penalty.

Word forms

Common combinations

open a retirement account

You can open a retirement account online in a few minutes.

contribute to a retirement account

Employers often contribute to a retirement account on your behalf.

withdraw from a retirement account

You may withdraw from a retirement account after reaching a certain age.

individual retirement account

An individual retirement account lets you save with tax advantages.

employer-sponsored retirement account

An employer-sponsored retirement account may include matching contributions.

Synonyms and how they differ

pension

A pension usually means regular income paid in retirement, often by an employer, whereas a retirement account is a pot of money you own and manage.

nest egg

Nest egg is an informal phrase for any savings set aside for the future and is not necessarily held in a special account.

retirement fund

A retirement fund is the money itself, while a retirement account is the container that holds it.

Word family

retire verb

to stop working permanently

retirement noun

the period of life after work

retiree noun

a person who has retired

retired adjective

no longer working

Commonly confused: retirement account or retirement account vs. savings account?

Practice

Make it your own

Write a sentence using “retirement account”, then check it and compare it with the examples above.

Explore more words