Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Thursday, February 20, 2014

Comparing 401(k)s and IRAs

Compare401(k)s and IRAs are two pre-tax  retirement planning devices with a shared goal, but important differences. These differences should be considered when deciding which account is the better choice. These differences include:

  • 401(k)s are created by an employer, while IRAs are created by an individual
  • 401(k)s offer the option for matching contributions by the employer
  • 401(k)s can offer higher limits for contributions
  • IRAs allow married account holders to designate a non-spouse beneficiary without spousal consent
  • Loans may be taken from 401(k) accounts in some circumstances

See Doresa Banning, 401(k) vs. IRA: 5 Key Differences, Fox Business, Jan. 27, 2014.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.



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