An index fund is a passively managed mutual fund that tries to track the performance of a market index, such as the S&P 500. See also: Passive Management.
An Individual Retirement Account (IRA) is a retirement plan for investors. There are two types of IRAs. The traditional IRA invests either before-tax money or after-tax money, deferring taxes on the before-tax contributions and earnings until the individual reaches age 59-1/2. Distributions from a traditional IRA are taxable except for return of any after-tax contributions. The Roth IRA invests after-tax money, with tax-deferred earnings. Distributions from a Roth IRA are tax-free if they are a return of contributions or if the individual has reached age 59-1/2.
The IRS is the Internal Revenue Service of the United States, responsible for collecting taxes and enforcing U.S. tax law.