Modern finance · 1950s–1990s
1974
ERISA creates the IRA
A US law protects workers' pensions and creates the individual retirement account.
In 1963 the Studebaker car company closed its US plant, and thousands of workers lost most of the pension they had been promised. Pressure built for pension rules.
The Employee Retirement Income Security Act, signed on September 2, 1974, set standards for private pensions and created the individual retirement account, so workers without a pension could save for retirement with a tax break.
💡 Why it made sense then
Workers had learned that a promised pension could vanish, and many had no pension at all.
🎮 In Journey Shares
The game has no retirement accounts, but it keeps the lesson that timing changes your tax: gains on shares held more than a week are taxed at 15% instead of 22%.
Ideas it gave us
- 🧭 IRA (traditional and Roth)
An IRA is a US retirement account you open yourself. A traditional IRA may lower your taxes now and is taxed when you withdraw; a Roth IRA is funded with taxed money and qualified withdrawals are tax-free.
Practise with $10,000 in play money
Free. No real money involved.