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401K vs. IRA

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Summary: The difference between a 401k and an IRA is that when people lose or leave their job they can roll over to their own retirement vehicle. Choose the best investment platform available with tips from an experienced financial adviser in this free video.

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By Patrick Munro
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Patrick Munro's affinity for investing and financial matters began more than 20 years ago with business education and service throughout the ranks of the banking, insurance and...read more

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Video Transcript

"In America, there are various savings vehicles that you as a working individual, can avail yourselves of, once you become out in the workforce. The most common of these is a 401k, if you're a salaried employee. There are various derivatives of this. If you're a teacher or a hospital worker, they're called a 403B, and if you are an executive for a corporation, they can be called a 457 Deferred Comp, but you'll notice the number four. That's just from the tax code, and it allows you as an employee, to put money away, and receive tax deductions, for that money, every taxation year. The difference between a 401k and an IRA, which is an individual retirement account, is that when people lose their job, or leave their job, they can roll over, under IRS guidelines, to their own instrument, their own retirement vehicle. Thus the name, individual IRA, individual retirement account, so there's really a difference. The 401k or the other fours as I mentioned earlier. The traditional, corporate, work a day, type retirement plans, but when you decide to set up your own private retirement account, it is called an IRA. This is Patrick Munro, talking about the difference between 401k's and IRA's."

eHow Article: 401K vs. IRA

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