You pick a financial company of your choosing and pick your own investments from a seemingly never ending list of options. Often, to diversify your tax interests both now and in retirement and diversify your investment choices, people will set up both a 401k and an IRA, traditional or Roth. When you leave your job you can take this account with you to your new employer, leave it where it's at, cash it out (while paying a large penalty for early withdrawal), or roll it into an IRA. Because of this it's hard to say whether you should have a 401k, an IRA, or both--but you can look at the advantages and disadvantages of all these options, see how they apply to your situation, and use that to make the decision you believe will work best for you. Everyone's personal circumstances are different in every way, including financially. A 401k is an account you set up through your employer. Your employer will pick a variety of investment options for you and have you pick from several investment packages, which you can switch between at any point over the years. An IRA, or independent retirement account, is something you can set up independently.
Who Voted for this Story Everyone's personal circumstances are different in every way, including financially.
Related Links Everyone's personal circumstances are different in every way, including financially.
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