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Is a 401k an IRA?

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Both 401(k) and IRA are means to finance retirement years, but they are not the same. A 401(k) is a company-provided account. The firm sets up this account for its employees, and only employees of this company can invest money into the account. An IRA is set up by an individual for himself.
401(k) has many advantages over traditional IRAs. It has higher allowances for tax-deferred savings, you can borrow money from your 401(k) account and the employer may provide contributions to a 401k plan. On the other hand, an IRA offers more investment choices. Both of them have eligibility requirements.

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