IRAs and 401(k)s are two common types of retirement accounts.
An individual retirement account, or IRA, is an investment account that an individual sets up with
a financial institution and can contribute to directly.
A 401(k), by contrast, is an employer-sponsored retirement plan. An employer creates a 401(k)
account for the employee. The employee may then contribute a percentage of each paycheck to
the account. And the employer may also contribute to the employee’s account.
Both IRAs and 401(k) provide for:
● Potential investment growth
● Tax advantages
● And the chance to build your wealth over time as you save for retirement
Whichever type of account you choose, the most important thing is to make sure you start
contributing as soon as possible.