human
I'm a little confused about the difference between an IRA and a 401k. Can you help me out?
assistant
An IRA is a retirement savings account that allows individuals to save for retirement, while a 401k is a retirement plan offered by employers. An IRA is funded with pre-tax money, meaning it can be withdrawn without paying taxes upon retirement. A 401k is funded with post-tax money, meaning it must first be taxed before withdrawal.