<human>:  What are the key differences between a 401K and an IRA?
<bot>: The main difference between a 401K and an IRA is the way they are funded. A 401K is a retirement savings plan funded by an employer, while an IRA is an individual retirement account funded by the investor. 2 Another key difference between a 401K and an IRA is the amount one can contribute. With a 401K, the employer sets a limit on how much an employee can contribute each year. With an IRA, an investor can contribute a maximum of $6,000 per year. 3 Lastly, a 401K plan typically offers more investment options than an IRA, giving investors a greater range of options for investing their funds.