Roth IRA

• The Roth IRA is a type of individual retirement account that is funded with after-tax money. You fund it with after-tax money and then invest the money into securities. The money that you make from these investments can grow tax-free. When you retire, at the age of 59 1/2, you can start taking money out of your Roth IRA without paying any taxes on it. This type of account is opened on an individual basis and is not offered through an employer.
  
  

401k No Match

• The 401k is a type of retirement account that you can get through your employer. When you make contributions to your 401k, your employer has the opportunity to match those contributions. This makes it possible for some employees to get free money for their retirement. Some employers choose not to match contributions. With this arrangement, you would be funding your own retirement completely in much the same way as if you had a Roth IRA.
  
  

Contribution Limits

• One of the biggest differences between these two types of accounts is the contribution limits. Each type of account has a maximum that you can contribute in a given year. As of 2010, the Internal Revenue Service allows you to contribute up to $16,500 to a 401k. If you are over the age of 50, you can contribute $22,000 per year. With a Roth IRA, the maximum is $5,000 per year, or $6,000 per year if you are 50 years old.
  
  

Investment Options

• If you are the type of person that enjoys having a lot of investment options, the Roth IRA might be your best bet. With a Roth IRA, you can invest in anything other than life insurance policies, collectibles and personal business deals. This allows you to invest in things like stocks, bonds, mutual funds, real estate and commodities. With a 401k, you can generally only invest in stocks, bonds or mutual funds, depending on who offers the 401k.
  
  

Money Access

• You may also want to consider how easy it is to access your money once it is put into a retirement account. With a 401k, you may be able to take out a loan against the cash value of your account. You can then repay the loan with interest. With a Roth IRA, you cannot take out loans, but you can withdraw the principal amount that you have contributed at any time without penalty. You simply cannot touch the gains from the account until you reach the age of 59 1/2 without paying a 10 percent penalty.