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What is the difference between a 401K and an IRA?
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The main difference between a 401K and an IRA is the type of account. A 401K is a type of retirement plan offered by employers, while an IRA is an individual retirement account that allows individuals to save for retirement on their own. Additionally, 401Ks usually offer more investment options than an IRA and employers often make contributions to a 401K. IRA contributions are generally made by the individual account holder. Both types of accounts are beneficial for retirement savings, but their different features may make one more suitable for a particular situation.