income tax deduction

an amount subtracted from an individual's adjusted gross income to reduce the amount of taxable income.

Individual Retirement Account (IRA)

an investment with specific tax advantages. A traditional IRA defers taxes on earnings until withdrawal and, under certain circumstances, allows the deduction of some contributions from current taxable income. A Roth IRA requires after-tax contributions only, but allows tax-free withdrawals under certain rules.


a risk management tool that protects an individual from specific financial losses under specific terms and premium payments, as described in a written policy document. Major types include health, auto, homeowners, life, and renters insurance.

interest rate

the percentage of what you borrow that you pay in interest in a credit arrangement. In a savings account or CD, the interest rate is the percentage of your principal, or what you deposited, that you earn.