What is the difference between a 401(k) and an IRA?

A 401(k) or other retirement plan is a retirement plan set up and maintained by an employer for employees. IRA (whether “traditional” or Roth) accounts are “Individual Retirement Accounts” that individual people can create at different investment organizations. Both 401k’s (and other retirement plans) and IRA’s have tax advantages that improve your ability to prepare for retirement, while “taxable” accounts do not. Taxable accounts, however are helpful for investing money that cannot be put into a tax-advantaged retirement account.