What does an Individual Retirement Arrangement (IRA) primarily provide for?

An Individual Retirement Arrangement (IRA) primarily provides tax-sheltered savings for retirement income. The key feature of an IRA is its tax-advantaged status, which allows individuals to save for retirement while deferring taxes on the investment growth until funds are withdrawn, typically during retirement when the individual may be in a lower tax bracket. This makes IRAs an effective tool for building a retirement fund and ensuring financial stability in later years.

In contrast, the other options focus on different financial solutions that do not align with the primary purpose of an IRA. Immediate tax deductions for year-round expenses relate more closely to deductions for business or personal expenses, rather than retirement savings specifically. Tax credits for education expenses address financial benefits related to education, not retirement. Lastly, income tax returns for dependents refer to tax filing obligations rather than a savings mechanism for retirement. Hence, the correct choice highlights the essential function of IRAs as a vehicle for retirement savings.