Traditional 401(k) PlanMost companies offer their employees a 401(k) retirement plans. This helps both the employee and the employer get tax breaks from the government. Keep in mind that not all 401(k) plans are the same and you should consult with the human resource department at your company for more details.Advantages:Many employers offer matching contribution, up to a certain percentage, to your 401(k) plan. For example, if your employer matched 3% of contributions and you make $50,000 per year, you can get up to $1,500 per year for free from your employer if you contributed at least 3% of your paycheck to the 401(k) plan.Yearly tax breaks from the government. Money contributed to the 401(k) plan is tax deductible. For example, if you made $50,000 this year and contributed $5,000 to the 401(k) plan, you will only be taxed on $45,000 for the year. Since you are not taxed right now, when you reach retirement and withdraw money, you will be taxed in the future.Disadvantages:One of the biggest downsides of 401(k) plans is their limited investment options. Depending on the broker who manages your 401(k) plan, they might only offer 5-10 investment options. Sometimes it is hard to diversify investments in a 401(k) plan.Most 401(k) plans will have much higher fees when compared to other options available out in the market. Usually 401(k) plans will have fees close to 1%, which seem like a small number up front. When compounded over few decades, it can end up costing you thousands of dollars in savings.Roth 401(k) PlanThe advantages and disadvantages of a roth 401(k) plan is same as a traditional 401(k) plan. The only difference between the two accounts is the way they are taxed.Instead of getting tax breaks in the year you contribute to the roth 401(k), you will get tax breaks in the future. For example, if you made $50,000 this year and contributed $5,000 to the roth 401(k) plan, you will be taxed on $50,000 for the year. But when you reach retirement and withdraw this money, there will be no taxes to pay.Basically the big difference between a traditional 401(k) plan and roth 401(k) plan is getting tax benefits now vs getting tax benefits in the future.Solo 401(k) PlanSolo 401(k) plans are similar to other 401(k) plans, the main difference being they are directed toward self-employed investors.Advantages:Since this is a self-directed plan, there are plenty of investment options available for people unlike other employer-sponsored 401(k) plans.One of the biggest advantages for solo 401(k) plans is that you can contribute as much as $53,000 per year.Disadvantages:There are high fees associated with opening a solo 401(k) plan compared to other retirement plans and can be a little tricky to set one up.If you are not managing your own portfolio, it can cost even more to have a professional financial planner to manage your portfolio.It is only for people who are self-employed and earn an income through a business.Traditional IRAThis is an individual retirement account which can be opened by anyone who earned an income in the U.S. By investing through a traditional IRA, you can get a tax break on the money invested in the account. The maximum amount that can be contributed to an IRA account is $5,500 per year if you are under 50 years old and $6,500 if 50 years or older.Advantages:You have unlimited investing options when it comes to opening an IRA account. There are many companies out there (such as Vanguard) which offer traditional IRA accounts.The plans are controlled by the individual and you have a lot of flexibility managing it. For example, you can transfer trustees anytime you desire.Disadvantages:Since this is an individual retirement account, there are no matches from an employer like a 401(k) plan.There is a limit on tax deductions given to you depending on your income. If you participate in another retirement account through your employer, you might not be able to deduct all your traditional IRA contributions. To get more details, click here.Withdrawals must begin at 70 ½ and if an investor fails to withdraw the money, half of the money will be automatically confiscated by IRS.Roth IRASimilar to a traditional IRA, roth IRA accounts are an individual retirement account, which have very different tax benefits. There are income limitations to who can contribute to a roth IRA. Click here to find out the income limitations for the year 2015.Advantages:The biggest advantage of a roth IRA is that withdrawals will be 100% tax free as long as the account has been in existence for five years and you are at least 59 ½ years old.Unlike a traditional IRA, there are no required minimum distributions after age 70 ½. There are no issues with IRS taking away any of your hard earned money.Disadvantages:Just like in traditional IRA, there are no matches from an employer.There are also no tax deductions in the year money is contributed to the roth IRA. Investors have to wait till retirement to take advantage of these tax breaks.SEP IRAThese are individual retirement accounts which are adopted by business owners to provide retirement benefits for the business owner and their employees. These are much easier to open compared to solo 401(k) plans.Advantages:One of the biggest advantages of SEP IRA is the contribution limits. You can contribute up to 25% of your annual salary, with a max cap at $53,000.There are no income limits unlike other IRA accounts and since they are offered by many brokerage firms, they have lower fees.Disadvantages:There are no employee contributions to SEP IRA, thus they are most beneficial for single business owners without any employees.Employer must contribute for the benefits of everyone in the company; they cannot select individuals who will receive benefits.Why IRAs Are Much Better Retirement Option Than 401k Recently the 401k fees have dropped close to 0.5% on average, but it still is higher than if you were to invest in IRA through Vanguard.