What is the difference between a 401k and a Roth IRA?
The primary difference between a 401k and a Roth IRA is in the way contributions are taxed. Contributions to a 401k are typically made with pre-tax dollars, meaning that they are not subject to federal income taxes when contributed. With a Roth IRA, contributions are made with after-tax dollars, but withdrawals are tax free. Additionally, 401ks have more investment options than a Roth IRA, as 401ks can be invested in stocks, bonds, mutual funds, and other investments.