2. How to choose retirement account ?

Tax-Advantage Individual Retirement Accounts

Individual retirement accounts are likely the investment accounts most people are familiar with, and include both a Traditional IRA and a Roth IRA. Both of these have tax advantages and can be used in conjunction with a 401(k) plan (if your income qualifies).

comparing retirement accounts - IRA

Traditional IRA

With a Traditional IRA, you make contributions with money you may be able to deduct on your tax return. Any earnings potentially grow tax-deferred until you withdraw them in retirement.

The great thing about a Traditional IRA is that you can generally have a one even if you have an employer-sponsored plan available at your day job.


  • Unlimited Investing Options – IRAs are completely self-directed, which will enable you to have virtually unlimited investment options.
  • Portable Accounts – The plans are also completely portable, and not in any way dependent upon any particular job.
  • Easily Transfer Trustees – You can also transfer the account from one trustee to another whenever you like.


  • No Employer Match – The contribution amounts on IRAs are much lower than what they are for 401(k) plans. And since there is no employer sponsoring it, there is no employer matching contribution either.
  • Uncertain Tax Deductions – Contributions to a Traditional IRA may not always be tax deductible. The deduction is phased out above a certain income level if you are covered by a retirement plan at work.

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