Which Plan is Best for Your Financial Future: Traditional IRA or 401(k)?

By Brendan Hughes0 Comments

Two of the most popular retirement savings accounts available today are the Traditional IRA and employer-sponsored 401(k). Of the two accounts, which is the best account for your financial future?

The answer according to Maggie Kirchoff’s article “IRA vs. 401(k): Which is Better?” in The Denver Post is, it depends.

While that might not provide a quick, easy answer to the question, it is a reminder that each plan has advantages and disadvantages and what plan is best is dependent on each unique situation.

The article suggests everyone review the details of each plan to make an informed choice, and as a helpful guide provides some high-level details, including differences in eligibility requirements, contribution limits, distribution rules, and tax deduction opportunities.

Also, it is important to understand what assets you can invest in with each plan. Both plans, if opened with a self-directed IRA custodian such as Equity Trust, allow investments in a full-range of assets beyond just stocks and bonds, including real property, tax liens, private businesses, livestock, oil and gas, and much more.

What do you think is the best retirement plan: a Traditional IRA or 401(k)? Let us know below in the comments.

Want to learn more about the different types of retirement plans? Set up a free, no-obligation IRA checkup with one of our Senior Account Executives. The checkup covers any questions you have about planning for retirement and is not limited to IRAs.