Business, 31.07.2019 20:00 thesleepycat

How is a 401k different from an individual retirement account (ira)? a 401k is a good long-term investment strategy. a 401k allows people to contribute before taxes. a 401k is created by an individual who deposits money. a 401k is created by an employer that matches contributions.

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Answer from: alialoydd11

Answering the question, 401k is created by an employer that matches contributions. This implies the correct answer is D

A 401k and IRAs are contributions plans and both plans provide tax-advantaged retirement savings.

Further Explanation

401K is a retirement plan that is sponsored by the employer. A 401K retirement plan means you have to contribute a certain portion of your paycheck. The contributions usually take place before the income taxes on your paycheck are removed.

There are various 401K plans with different investment options but the options applicable to 401K plans depend on the provider.

However, the money you contribute towards your 401k accounts is pre-tax. This money is invested into different investments and it is to be determined by the sponsor.

Individual Retirement account (IRA) is also a tax-advantage retirement saving that can be created by an individual.

However, the different types of IRAs include:

Traditional IRAs: with this type of individual retirement account, you can make contributions towards your investment retirement account before the income taxes on your paycheck are deducted.

Roth IRAs: this individual retirement account is a special account, you will be taxed on the money you contribute to investment retirement account but won’t be taxed if you decide to withdraw your money in future. This type of individual retirement account is good if you are making a lot of money

Other types of individual retirement account include

Sep IRAs: Simple IRAs

LEARN MORE:

Which is a retirement plan that offered by employers ? linkWhat is a major difference between a traditional Individual Retirement Account and a Roth IRA link

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401kindividual retirement accountIRAsemployersRoth IRAssep IRAsSimple IRAs

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