When opening individual retirement accounts, some people prefer to purchase individual stocks (as opposed to mutual funds, as is typical for a 401(k) account). Investing in stocks avoids mutual fund fees, for one thing.

It also allows bigger financial risks. Many people target their 401(k) investments for guaranteed income, and leave the risky investing for my much-smaller IRA.

IRAs are not for everyone. Novice investors may not be prepared to manage stock holdings. Rules prevent everyone from contributing money to an IRA. Those who can contribute can only contribute up to a certain amount. People saving for retirement should speak with a financial advisor to discuss investment strategies.