What is one main difference between a 401 (k) and a Roth IRA?

A 401 (k) is something you can sign up for individually; a Roth IRA is something your employer offers.

A 401 (k) does not offer profit sharing options but Roth IRAs do.

You contribute post-tax money to a 401 (k) and pre-tax money to a Roth IRA.

You contribute pre-tax money to a 401 (k) and post-tax money to a Roth IRA.

Question

Business

Martin Webb

2 April, 02:22

What is one main difference between a 401 (k) and a Roth IRA?

A 401 (k) is something you can sign up for individually; a Roth IRA is something your employer offers.

A 401 (k) does not offer profit sharing options but Roth IRAs do.

You contribute post-tax money to a 401 (k) and pre-tax money to a Roth IRA.

You contribute pre-tax money to a 401 (k) and post-tax money to a Roth IRA.

+1

Answers (2)

Know the Answer?

Sage Garza · Answer 1

contribution are taxed differently

Explanation:

AP3X

Carlie Neal · Answer 2

The correct answer is letter "D": You contribute pre-tax money to a 401 (k) and post-tax money to a Roth IRA.

Explanation:

The main difference between a 401 (K) retirement account and a Roth Individual Retirement Account (IRA) relies on how contributions are taxed. While 401 (k) account contributions are pre-taxed, Roth IRA contributions are after-taxed. Besides, 401 (K) accounts are employer-sponsored while Roth IRAs can be opened by individuals.