Which type of account is typically used for retirement savings?

The Individual Retirement Account (IRA) is specifically designed to help individuals save for retirement in a tax-advantaged way. Contributions to an IRA may be tax-deductible, and the funds in the account grow tax-deferred until withdrawal during retirement, making it an effective tool for long-term savings. IRAs can also offer a range of investment options, such as stocks, bonds, and mutual funds, which can be chosen based on the individual's risk tolerance and investment goals.

In contrast, custodial accounts are typically established for minors, with an adult managing the funds until the minor reaches a certain age, serving more for savings and investment on behalf of a child. Joint accounts involve two or more individuals sharing ownership of the account, often used for shared expenses or joint savings but not specifically for retirement. Brokerage accounts are more general investment accounts that allow individuals to buy and sell a variety of securities but do not have the tax advantages associated with retirement accounts like IRAs.