Individual Retirement Accounts (IRAs) are savings accounts with specific income tax incentives and penalties designed to encourage working people to save for retirement. IRAs were first authorized in the Employee Retirement Income Security Act of 1974 (ERISA) as a means of encouraging working people to save for retirement. Recently, pre-retirement withdrawals from IRAs for higher-education costs and a first-time home purchase have been authorized. This article provides the history of IRAs and their effect on saving.