Understanding the key differences between an IRA and a 401(k)

You can save for retirement automatically, whether you use a 401(k) or an IRA​​.
Alyssa Powell/Insider
A 401(k) is a retirement account funded with pre-tax dollars and has higher contribution limits but fewer investment options.
With an IRA, contribution limits are lower, but you have more options for your investments as well as when you'll be taxed.
A 401(k) and IRA can both be used to invest in stocks, bonds, and securities for retirement.
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