Yes, IRAs work similarly to other retirement accounts. Once you fund your account, you can make IRA investments in stocks, bonds, and other assets.
IRA plans typically offer thousands of investment choices, including individual stocks, ETFs, mutual funds, and even alternative assets like cryptocurrency. This allows you to optimize your IRA investments for aggressive growth, balanced growth, or cash preservation depending on your age and retirement plans.
On the other hand, the average 401(k) only offers between 8 and 12 investment choices, with some offering fewer – these choices tend to be mutual funds or stable value funds. This difference is important because you’ll want to have choices for you to invest your portfolio based on your goals.