To download a printable version of this transcript, click here.
 
 
iQuestions Faculty, Ron Blue 
 
 
Question: 
 
What can you tell me about IRA’s, 401K’s, and 403B’s? 
 
Answer: 
 
What I can tell you about retirement plans—now in American today, 
most retirement plans are self-funded. The corporations are no longer 
doing a lot of the funding for you, and that’s because the corporations 
were taking on a lot of risk that they didn’t want to assume. So, when 
the laws changed, and when we had IRAs, 401(k)’s, and 403(b)’s, it 
became a personal responsibility to plan and to save for retirement.  
 
The government was really sending a message, and they were saying, 
“You can’t count on Social Security to provide for your retirement. You 
need to plan for your own retirement.” And there’s nothing wrong with 
that. The question is, “How much should I put into an IRA, or a 
401(k), or a 403(b)?” and the answer is, “As much as you possibly 
can.” 
 
You get to deduct whatever it is that you put into those retirement 
plans from your taxes right now. All of the income that is generated 
within that type of retirement plan accumulates on a tax-deferred 
basis—meaning that at some point, you will have to pay taxes on what 
you take out, but you get the benefit of the compounding that goes on 
while it’s inside that retirement plan. 
 
Is an IRA an investment? No, an IRA is a place that you make 
investments. Is a 401(k) an investment? No, it’s a place that you park 
your investments. Same thing with a 403(b). 
 
 
 
A lot of people get confused on the terminology. An IRA or a 401(k) or 
a 403(b) is a vehicle where I make investments. The types of 
investments that I make within those are dependent upon several 
circumstances. If I am managing them myself, I’m probably going to 
chose some type of mutual fund—some type of no-load mutual fund, 
or I’m going to get professional counsel, or I’m going to be able to rely 
on the counsel of those provided to me by the place that I work—the 
corporation or the non-profit organization that I work for. 
 
The important thing to know is that the investment decisions that you 
make within your IRA, 401(k), or 403(b) are your responsibility. You’re 
the one who needs to be deciding where that money is going to be 
invested. You should be contributing as much as you possibly can to 
those retirement plans, because you get to deduct the full amount 
that’s contributed. You should be managing those investments with a 
long-term perspective, very conservatively and very prudently. 
 
  
 
Page -2- 
To download a printable version of this transcript, click here.