Introduction

The 401k and IRA are two of the most popular retirement savings options available today. They both offer tax-deferred growth, making them attractive options for those looking to save for retirement. However, there are some notable differences between the two, and it is important to understand the benefits of each before deciding which one is right for you. In this article, we will look at the positive benefits of each option, so you can make an informed decision about which one is best for your specific needs.

What is a 401k?

A 401k is a retirement savings plan offered by employers to their employees. Contributions to the 401k are made on a pre-tax basis, allowing for tax savings on the amount invested. In addition, employers may match employee contributions to a 401k with free money, effectively doubling the amount of retirement savings. There is an annual contribution limit to a 401k, with 2019 limits set at $19,000, or $25,000 for those aged 50 or over.

What is an IRA?

On the other hand, an IRA, or Individual Retirement Account, is an investment plan for individuals with no employer involvement. The contributions to an IRA are