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I know that the 401k plan is like stocks and it goes up and down and I do not want that so i was jus wondering is there an ira or a retirement plan that is interest based only.
A 401K can be invested on bonds or money market funds, very conservative investments. They are much less risky that stocks,so their earnings, although more predictable, are more modest.
There are two major advantages to a 401K: 1) you don’t pay income tax on the money you put into it. and 2) Companies ofter match funds up to a certain point. Disadvantages: It’s hard to get the money out before you are 59.5 years old, and you have to pay taxes on it when you take it out.
There are other approaches.
There are self-funded IRA’s, you put money into than that you have already paid taxes on. You have more flexibility about how your funds are invested. The advantage is that you only have to pay taxes on your capital gains when you take it out, not on the principal.
Disadvantage: Your money is tied up with a bank or insurance company, and it may be hard to get it out early.
You could open a savings account at your bank or credit union. If you make regular deposits, over time your bank balance will grow. The advantage is that you can get your money if you really need it. That is also the disadvantage, because it you raid it, there goes your retirement fund.
Grandpa
A 401K can be be invested in a fixed income investment or bonds or any number of investments besides stocks.
IRAs can be invested in federally-insured savings or certificate of deposit accounts in addition to various other forms of investment.
These retirement accounts are arrangements that offer tax advantages. The types of investments you can choose fall within that arrangement.