IRA, Individual Brokerage Account or 401(k): Which one to choose

IRA, Individual Brokerage Account or 401(k). Which one benefit you best. 

Feature	IRA (Traditional & Roth)	401(k) (Traditional & Roth)	Individual Brokerage Account
Purpose	Primarily retirement savings	Primarily retirement savings (through employer)	General savings and investments (not primarily retirement)
Availability	Open to most individuals with income	Offered by employers	Open to everyone
Contributions	Individual contributions (may be tax-deductible for Traditional IRA)	Employee contributions (pre- or after-tax), potential employer match	Individual contributions (after-tax)
Contribution Limits (2024)	Lower annual limits (e.g., $7,000 for under 50)	Higher annual limits (e.g., $23,000 for under 50)	No direct annual contribution limits
Tax Advantages	Traditional: Tax-deductible contributions (may be), tax-deferred growth. Taxed upon withdrawal (as income). <br> Roth: After-tax contributions, tax-free growth and qualified withdrawals in retirement.	Traditional: Pre-tax contributions, tax-deferred growth. Taxed upon withdrawal (as income). <br> Roth: After-tax contributions, tax-free growth and qualified withdrawals in retirement.	No direct tax advantages. Capital gains and dividends are taxed currently.
Withdrawals Before Retirement	May incur taxes and penalties (some exceptions exist).	May incur taxes and penalties (some exceptions exist).	Flexible withdrawals at any time, but gains may be taxable.
Employer Role	None	Employer may offer the plan and potentially match contributions.	None
Investment Control	Generally greater control for the individual.	Some control, but the range of investment options is often determined by the employer's plan.	Full control for the individual.
Complexity	Relatively simple to open and manage.	Can be more complex depending on the employer's plan.	Relatively simple to open and manage.
Popularity	Very popular for individual retirement savings.	Very popular as primary retirement savings through employment.	Popular for general savings and investments outside of retirement savings.

Here's a brief summary of when to choose which account:

• IRA (Traditional or Roth): Choose this if you want an individual retirement savings account independent of your employer. Roth IRA is particularly beneficial if you expect higher taxes in the future. Traditional IRA can be good if you can deduct your contributions and believe your tax rate will be lower in retirement.
• 401(k): If your employer offers a 401(k) with a match, it's often a very good first step in your retirement savings due to the "free" money from the employer. Always take advantage of the match if possible.
• Individual Brokerage Account: Use this account for savings and investments that are not specifically for retirement. It gives you full flexibility to withdraw funds when you need them, but you don't get the same tax advantages as with retirement accounts. It's good for goals like a down payment on a house, children's education (if not using a 529 plan), or just general long-term savings after maximizing your tax-advantaged retirement contributions.

Many individuals use a combination of these accounts depending on their financial situation and goals. For example, someone might contribute to their 401(k) to get the employer match and also have a separate IRA and an individual brokerage account for other savings and investment goals.