ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Almost any type of investment is permissible inside an Individual Retirement Account (IRA), including stocks, bonds, mutual funds, annuities, unit investment trusts (UITs), exchange-traded funds (ETFs), and even real estate.

Detailed explanation-2: -Yes, you can have both accounts and many people do. The traditional individual retirement account (IRA) and 401(k) provide the benefit of tax-deferred savings for retirement. Depending on your tax situation, you may also be able to receive a tax deduction for the amount you contribute to a 401(k) and IRA each tax year.

Detailed explanation-3: -You can contribute to both a 401(k) and an IRA, up to the maximum annual contribution limit for both. However, there are income limits that prevent some employees from being eligible to deduct traditional IRA contributions if they are also covered by a 401(k) at work.

Detailed explanation-4: -When you open an IRA, you contribute funds that can then be invested in a wide range of assets-CDs, stocks, bonds and other investments. You’re not limited to a menu of investments as you often are in a 401(k). That means you can take full control of picking how this account is invested.

Detailed explanation-5: -Yes, you can have multiple active 401(k)s, 403(b)s, SEP IRA, Solo 401(k) or other type of retirement plan at once. Your contributions as an individual can’t exceed the annual limit for all plans combined, but your employer can contribute the maximum in each unrelated plan.