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<p>[QUOTE=&quot;fatima, post: 1487633, member: 22143&quot;]For most people, A Roth is a type of IRA.&nbsp;&nbsp; </p><p><br /></p><p>For clarification there are 401 K plans and IRAs.&nbsp; They are similar but different laws and income requirements apply to them.&nbsp; And IRA stands for Individual Retirement Account and a Roth IRA is one of several types.&nbsp;&nbsp; The other most common is the Traditional IRA.&nbsp;&nbsp; The primary difference is whether the amount deposited is pre-tax or after tax.&nbsp;&nbsp; Anyone can own an IRA whether employed or not and for most people you can simply open one at any financial institution.&nbsp;&nbsp; </p><p><br /></p><p>A 401K is a retirement plan offered by employers to employees.&nbsp;&nbsp; Money is generally deposited on a pre-tax basis though some plans allow for after-tax (roth 401K) deposits as well.&nbsp;&nbsp; These plans became popular for corporations as replacement for the traditional pension plans.&nbsp;&nbsp; </p><p><br /></p><p>There are some big differences.&nbsp; There are no income limits to 401Ks.&nbsp; For IRAs the pre-tax deferral ends at a certain income level and the amount that can be deposited each year is a lot less.&nbsp;&nbsp; There is also a special provision for 401Ks that allow withdrawals to begin at age 55.5 instead of 59.5 without the 10% penalty.&nbsp;&nbsp; IRAs have a wide range of investments available, whereas a 401K is limited to whatever the employer provides.&nbsp;&nbsp; </p><p><br /></p><p>----------------------</p><p><br /></p><p>For the investor, it&#039;s important <u>to understand</u> the differences because both offer certain advantages for tax avoidance and long term savings.&nbsp; Even if you participate fully in your employer&#039;s 401K plan, you should also consider opening an IRA.&nbsp; The tax savings can be considerable depending upon your circumstances.&nbsp; &nbsp; IMO, the reasons that one would hold physical PMs precludes using them for IRAs but others might feel differently about this.&nbsp;&nbsp; Physical PMs allow one to move wealth out of &quot;the system&quot; so putting them in a IRA would eliminate this advantage.[/QUOTE]</p><p><br /></p>

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