The typical American worker will have multiple retirement accounts by the end of her/his career, and the most common types of accounts are 401(k)s and Individual Retirement Accounts (IRAs). While a 401(k) is an employer-sponsored plan, an IRA, as its name suggests, is an account that individuals can open for themselves. The biggest difference between the two, are the contributions limits.  

 

In 2019, employees who participate in a 401(k) can contribute up to $19,000 per year (under age 50). If age 50 or over, the contribution limit allows an additional $6,000.  

 

In the case of Traditional and Roth IRAs, in 2019 the contribution limits are $6,000 per year (if you are under age 50). If you are age 50 or over, the contribution limit is $7,000.

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