Is an IRA the same as a 401K?

No. An IRA stands for Individual Retirement Account because it’s something you set up and contribute to as an individual. 401(k) retirement accounts are “sponsored” or set up by employers as a benefit plan for their employees. They are responsible for keep records and administering the plan, and they give employees a set of options for investing contributions. Many employers also offer matching contributions to encourage workers to contribute to their 401(k) plan. Another difference: contributions to employer-sponsored plans are tax-deductible, but contributions to some IRAs -- specifically Roth IRAs -- are not tax deductible.