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IRA vs. 401(k)

Understanding your options for retirement plans can be challenging. You may be wondering about the benefits of an IRA (Individual Retirement Account) vs. a 401(k). While the IRS sets different guidelines for each kind of retirement account, there are benefits to both that can help you save more.

Learn about the advantages of opening an IRA today.

IRA Vs. 401(k) | Knowing the Difference

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A 401(k) is an employer-sponsored retirement account product, and many employers offer matching contributions as a benefit to their employees. Typically, 401(k) plans limit the savings options available to employees.

An IRA is also a financial product designed to help individuals save for retirement. Anyone can open an IRA as long as they have an income. It’s important to consult your financial or tax advisor before contributing to an IRA.

In most cases, both an IRA and 401(k) offer great savings potential for a retirement plan.

Benefits of an IRA

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If you’re already regularly funding your 401(k), you’re taking advantage of higher limits on yearly contributions matching funds from your employer. This is a great way to make steady progress on your retirement savings goal.

If you don’t have the option of opening a 401(k), an IRA can be a beneficial savings tool for you.

Whether you choose a Traditional IRA or Roth IRA, you’re committing to saving money and creating an additional source of income in retirement.

You also have two types of IRA deposit accounts to choose from: IRA Certificates of Deposit (CDs) and IRA Money Market Accounts. Both Traditional and Roth IRAs require minimum deposits.

Synchrony Bank does not provide tax advice so be sure to contact your tax advisor or financial consultant before opening or contributing to an IRA.

Open an IRA Today at Synchrony Bank

Synchrony Bank offers a range of savings products, including IRA CDs and IRA Money Market Accounts, with competitive rates+ and minimum deposit requirements—plus award-winning customer service and convenient online access.

Call 1-844-345-5789 to learn how you can start saving for retirement today.

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Sources:

IRS: https://www.irs.gov/retirement-plans/individuals-retirement-arrangements-getting-started

+National Average APYs are based on specific product types of top 50 U.S. banks (ranked by total deposits) provided by Informa Research Services, Inc. as of 11/01/2016. CD Rates: Average APYs are based on certificate of deposit accounts of $25,000. Although the information provided by Informa Research Services, Inc. has been obtained from the various institutions, accuracy cannot be guaranteed.


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