human
I'm a little confused about the difference between an IRA and a 401k. Can you help me out?
assistant
An IRA (Individual Retirement Account) is a retirement account that allows individuals to save for retirement without paying taxes on the money until they withdraw it in retirement. A 401(k) is similar, but with a few key differences. First, contributions to a 401(k) are made pre-tax, meaning that your contribution is not subject to income tax at the time of deposit. Second, 401(k)s typically have higher contribution limits than IRAs, allowing more people to save for retirement. Lastly, 401(k)s offer a variety of investment options, including stocks, bonds, mutual funds, and other assets.