No, an IRA is not the same as a 401k.
A 401(k) plan is a tax-advantaged, defined-contribution retirement account often offered by employers to their employees. Usually, employees can make contributions to their 401(k) accounts through automatic payroll withholding, and their employers can match some or all of those contributions.
An IRA is a retirement account that you can contribute to outside of work.
Contributions to a traditional IRA may be tax-deductible but the deduction may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds certain levels. Please see IRA deduction limits for details.
Contributions to a Roth IRA are not tax-deductible. Your Roth IRA contribution may be limited based on your filing status and income. Please see 2020 - Amount of Roth IRA Contributions You Can Make for 2020 for details.
The total contributions you make each year to all of your traditional IRAs and Roth IRAs can't be more than:
- $6,000 ($7,000 if you're age 50 or older), or
- If less, your taxable compensation for the year
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