human
I'm a bit confused about the difference between the 401k and the IRA.
assistant
The 401(k) is an employer-sponsored retirement savings plan that allows employees to save for retirement before taxes are taken out. The money can be invested in stocks, bonds, mutual funds, and other securities. The contributions you make to your 401(k) are usually tax deductible, which means they reduce your taxable income. You may also be able to take advantage of employer matching contributions if your company offers one. An IRA (Individual Retirement Account) is similar to a 401(k), but it's funded solely by the employee and not by their employer. Contributions to an IRA aren't tax-deductible, so the money grows without taxation until it's withdrawn.