401k vs IRA
Investments
The investment options available in 401(k) plans and IRAs differ significantly
401(k) plans
Limited Investment Menu
401(k) plans typically offer a curated selection of investment options chosen by the employer and plan administrator
Mutual Funds and Target-date Funds
Most 401(k) plans focus on offering mutual funds and target-date funds as the primary investment options
Employer Stock
Some 401(k) plans may include company stock as an investment option.
Less Flexibility
Participants are restricted to the investment choices provided within the plan
IRAs
Wide Range of Investment Options
IRAs offer significantly more investment flexibility compared to 401(k) plans
Individual Stocks and Bonds
IRA holders can invest in individual stocks and bonds, providing more granular control over their portfolio
ETFs and Mutual Funds
A broader selection of ETFs and mutual funds are typically available in IRAs
Alternative Investments
IRAs allow investments in real estate, precious metals, and other alternative assets
Greater Control
IRA owners have more freedom to choose their investments and adjust their portfolio as needed
IRAs provide more investment options and greater control over investment choices, while 401(k) plans offer a more limited, curated selection of investments chosen by the employer and plan administrator.
This increased flexibility in IRAs allows for more tailored investment strategies, but also requires more active management and decision-making by the account holder
Gateway helps determine what is right for your retirement goals. We help utilize both options to optimize your retirement picture
Gateway is here to help you navigate your current retirement plan choices and be a guide to the best options available. We’re only a phone call, an appointment, or email away for a free, no-obligation discussion about what makes sense for your financial situation.