 TITLE: What Is the Difference Between a 401(k) and an IRA? CONTENT: What Is an IRA?\n---------------\nAn IRA is another way to save and invest for your retirement, but it's something you can do on your own instead through an employer. You would open an IRA for yourself at a bank, credit union, investment firm, broker or through a mutual fund provider. The different types of IRAs are as follows.\n*   **Traditional**: You can save pretax earnings and, as long as you qualify, those contributions will reduce your taxable income. So if your salary is $40,000 and you save $5,000, your taxable income will be $35,000. Your contributions are instead taxable only when you begin to withdraw the funds.\n*   **Roth**: With this IRA, you contribute after-tax earnings. Your contributions and the money they make are not treated as income when they're withdrawn, so will not be subject to income tax.\n*   **Spousal**: You can open a separate traditional or Roth IRA so a working spouse can make contributions in the name of a non-working spouse. This way, both partners will have their own retirement account to tap into when the need arises.\n*   **Rollover**: When you switch employers, you can transfer the money in a 401(k) plan to a rollover (traditional) IRA. While you may be able to remain with your employer's plan, the rollover IRA can reduce fees and provide you with greater control over your investments.\nSmaller companies that don't offer 401(k) plans have special IRAs available to them:\n*   **Simplified employee pension (SEP)**: This plan allows business owners to contribute to both their employees' and their own retirement savings. It follows the same rules as traditional IRAs, but only the employers can contribute, not their employees.\n*   **Savings Incentive Match Plan for Employees Individual Retirement Account (SIMPLE)**: This IRA has similar benefits to a 401(k), and employees can add money to their account with elective contributions from their paycheck. END