Asked by Michael Morrison on Jul 02, 2024
Verified
What is the difference between an IRA and a 401k?
IRA
An Individual Retirement Account, a saving tool that allows individuals to set aside money for retirement with tax advantages.
401k
A retirement savings plan that is sponsored and set up by an employer for its employees; like other retirement plans, there are strict rules as to when the money can be withdrawn without a penalty and strict contribution limits which change from year to year.
- Distinguish between Individual Retirement Accounts (IRA) and 401(k) plans, focusing on their respective tax consequences.
Verified Answer
Learning Objectives
- Distinguish between Individual Retirement Accounts (IRA) and 401(k) plans, focusing on their respective tax consequences.
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