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mrwaqas786
New Member

What is IRA contribution. Is it same as 401K?

 
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JohnR1
New Member

What is IRA contribution. Is it same as 401K?

No - IRA plans and 401k plans are different kinds of retirement plans.

A principal distinction between them is that 401k plans are offered by many employers to their employees, which allow employees to contribute their pre-taxed dollars for retirement; whereas IRAs are self-directed accounts that you directly contribute towards and they are basically classified based on how your money will be taxed – traditional IRAs are taxed when you withdraw from it (during retirement) and Roth IRAs are taxed when you put money in.

Here is a TurboTax blog which provides a good comparison between an IRA plans and a 401k plans:

http://blog.turbotax.intuit.com/income-and-investments/401k-ira-stocks/which-should-i-invest-in-firs...

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