A 401(k) plan gives participants little choice. The company will have selected the fund manager. The fund manager will decide how to invest the employees’ money—and the employees can watch it grow.
Funding an IRA requires initiative from the participant. You can obtain an IRA from a bank or a brokerage or a financial investment firm. They’ll offer you a range of options to suit your chosen level of risk. They’ll contain different amounts of stocks and bonds, and you may even be able to choose a simple savings account that you can use for your IRA, although the interest rate is likely to be relatively low.
