If you are trying to decide between an IRA vs. 401(k), count yourself lucky. Not everyone's employer offers 401(k)s, and many working people feel too cash-strapped to contribute to a retirement account. And that's a shame — because these popular accounts act as powerful, tax-advantaged ways to save toward retirement. Given common concerns about the Social Security trust fund, which is projected to run out of money as early as 2033, IRAs and 401(k)s are even more crucial for a secure retirement.
While they share many characteristics, there are also key distinctions to be aware of when comparing an IRA vs. 401(k). For example, many 401(k) plans offer an employer match up to a certain amount, while IRAs lack this feature. If you understand these similarities and differences, you can compare them to determine the best way to save based on your circumstances and goals.
