IRA vs 401(k): Which one is better?

IRA vs 401(k): Which one is better?

A 401(k) or an IRA have many similarities, which one should investors choose as many people can’t afford to have both.

Many experts believe the 401(k) is the clearly superior option.

However, other financial advisors stress that both plans are valuable to retirement planning.

If you have earned any income in a given year, you can contribute to an IRA.

If you open an IRA online, you can do it in 15 minutes or less.

On the contrary, to get a 401(k), you’ll have to work at a company that offers one.

While they might be harder to obtain, 401(k) plans make up for it with the potential for free money.

If you want the best possible selection of investments, IRA will offer you the most options.

If you take out cash from an IRA, you’ll likely be charged taxes and penalties.

The 401(k) may allow you to take out a loan, depending on how your employer’s plan is structured.