Multiple Choice QuestionAn IRA is a type of ______.Multiple choice question.equity loanpension fundinsurance policymortgage

1. Break Down the Problem

We need to identify which option correctly describes an IRA (Individual Retirement Account).

2. Relevant Concepts

An IRA is a tax-advantaged account designed for retirement savings, where individuals can save and invest money for their retirement while enjoying tax benefits.

3. Analysis and Detail

• Equity Loan: This refers to a loan secured by the equity in a property, unrelated to retirement accounts.
• Pension Fund: While an IRA is a retirement savings account, it is not a pension fund, which typically involves employer contributions and payouts during retirement.
• Insurance Policy: An insurance policy is a contract providing financial protection, not related to retirement savings accounts.
• Mortgage: A mortgage is a loan specifically for purchasing property, not applicable to IRA definitions.

4. Verify and Summarize

The IRA is specifically focused on individual retirement savings, distinct from loans or insurance. Among the options provided, there’s no perfect match, but the closest description is related to retirement savings.

Final Answer

The best option is pension fund, although an IRA functions differently than a traditional pension fund.