What's the difference between 401k and IRA. Which is best for retirement planning?

[Critter-3]

401K ... offered thru your job, may have employer matching amount, has  limited  investment choices

IRA ...  retirement plan set up outside of the employer system, lower amount of contribution is allowed, deduction on return can be limited if you or your spouse has a 401K,  investment options only limited by the IRA custodian system. 

[jeliesse]

Thank you. Is it better Roth Ira or Traditional? 

[Critter-3]

The traditional IRA ... you can deduct the contribution on the current year return and save taxes now but all the distributions later are fully taxable.

OR

The ROTH IRA ... you do not get any current year tax savings but all the distributions later are TAX FREE.

So do you want/need the deduction now  or do you want to wait for the bigger reward later ?