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Planning for retirement is a vital part of life. No one wishes to be dependent on their loved ones for financial support when they are older, and no one wants to work until the day they die.

There are lots of different retirement plans that people use to avoid that. The two we will descuss now are IRA and 401K.

IRA 401K Almost all companies offer a 401k plan to their employees. In most cases, they will match your contributions 100% for a specified number of years or total amount.nThey have their reasons.

They are required by law, to keep x amount of liquid dollars to back up the benefits they are offering to their employees. By encouraging you to contribute to the 401K they get more money on hand to claim.

Also, they get to earn more money from the money you contribute to the fund whether by investing in the market or using in their own business. So when it comes time to pay it back to you, they will be paying you back with mostly your money and the earnings from the money you contributed.

An IRA is an Individual Retirement Account. This is an account created by the government to encourage people to start investing for their own retirement rather than relying completely on the 401k plan their company offers or the Social Security system. By encouraging us to plan for our retirement, they ease the strain on the Social Security.

Since their are so many types of IRA's, it may be difficult to decide which is the best for your plan. Discuss your retirement goals with a financial advisor and they can help you see which is the right one.