<human>: I'm a little confused about the difference between a 401k and a IRA. Which one is better?
<bot>: The main difference between a 401k and an IRA is that a 401k is sponsored by your employer, while an IRA is an individual retirement account that you can set up on your own. A 401k typically offers more investment options than an IRA, such as stocks and bonds, which are not available in an IRA. Another major distinction is the contribution limit for each type of account; 401ks have higher limits than IRAs. Additionally, 401k contributions may be made with pre-tax dollars, whereas IRA contributions must generally come from after-tax income.