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What's the difference between a 401k and a Roth IRA?
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The main difference between a 401k and a Roth IRA is that a 401k is funded with pre-tax salary contributions, while a Roth IRA is funded with post-tax contributions. The other differences include: 401k contributions are usually provided through an employer, whereas Roth IRAs are funded solely by the individual; 401k contributions have an annual limit set by the Internal Revenue Service (IRS), which is significantly higher than the amount allowed for a Roth IRA; and 401k withdrawals are taxed, whereas Roth IRA withdrawals are typically tax-free.