Which has higher return on investment (on average) IRA's or 401K's?

I have a 401K currently with my employer and since inception it has returned 15% overall and in the last 3 months 8.65%.

I have a high interest savings account that pays 5.50% but I was wondering would I do better with an IRA? I currently put in $50 a week into the savings account.

There are tax implications that will dictate how much you can put into these types of accounts (so check that out before you put any more money into the IRA).

However, in most 401(k) plans, the employer is matching some of what you put in, so right away you are ahead of any IRA because you are getting 100% interest on the amount they match.

On the other hand, you need to learn from the fiascos at Worldcomm and Enron (just to name two) where people put all their 401(k) into their employer's stock. Don't put it all there!!!

You are doing good to diversify, but you can probably do better than just a savings account. If you are looking at using the IRA for 20-30 years down the road, you can afford to take a little more risk.

You should also know that basically you can invest your IRA funds in just about the same things as you can with a 401(k), so there may not be much difference in their returns except for the pretax benefits from the 401(k).

WARNING: Be aware that there are HUGE tax liabilities and penalties if you withdraw your money from either the IRA or the 401(k) before you are 59 1/2 (check the age requirements).

The return on investment really depends on what your IRA or 401(k) is investing in. There really is no "average" ROI.

A savings account and an IRA is two totally different things. With a savings account, you can withdraw your money at any time. Once you open an IRA and deposit funds into it, you cannot withdraw the money until you reach 55-1/2 years in age. Any withdrawals from the IRA will be subject to income tax (the money going into your savings account was already taxed, so no income tax is assessed on withdrawals), and if you have not reached the age of distribution, it is also subject to a 10% flat tax (in addition to income tax at your marginal tax rate) as an early withdrawal penalty.

The 401k has a better rate of return because of the pre-tax advantage. You take into consideration the savings in current tax dollars and the lower tax bracket that you would be in when you receive the distribution.

I would open up a IRA on the side, just in case you decide to leave your employer and you want to roll it into a IRA and keep it there. You have more advantages with a 401k(loans and the max of 15K you can contribute). You are limited in a IRA on how much you can contribute. I would have to double check, but I am pretty sure the limit for a IRA is $4,000/yr. Also with a 401k, your employer can also have a profit sharing program and also company match, so that pushes you farther along to reaching that max of $44,000/year(for 2006).

The thing about a 401K vs. an IRA is you have more freedom in choosing funds in a IRA. You may want to choose other funds that may be riskier than what your plan offers, and that is when a IRA can also come into play to benefit you.

you need to read up on what an IRA and what a 401k is. i don't think you have a clue at this point. information is everywhere. don't be lazy

Your rate of return has nothing to do with whether it's in an IRA or a 401k. What matters is what the money is invested in. Stocks give you the highest return but they also present a risk. Apparently your 401k is in stocks. Did someone help you with that? If they did, they did very well for you. Ask them to help you out here too. Learn about investing and do what's most comfortable for you. There's lot of good info on Yahoo finance and it's free.