Investors are often confused about the difference between retirement accounts and investments. Let me clarify.

Retirement accounts are tax sheltered accounts. Roth and Traditional IRA are individual retirement accounts. 401(k) and 403(b) are the tax codes for these two well known retirement accounts for employees of businesses and organizations.

How are they different than an investment? Investments go into retirement accounts. This is identical to money going into your checking account. Your checking account only has value when you have money in it. The same is true of investments and retirement accounts. The investments have value and the retirement account protects and leverages that value.