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What is the difference between a 401(k) and an IRA?
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The primary difference between a 401(k) and an IRA is that 401(k)s are typically sponsored by employers while an IRA, or Individual Retirement Account, is not. 401(k) plans offer pre-tax contributions and often feature an employer match, whereas IRA's offer more flexibility with the types of investments that can be made. Additionally, 401(k)s have higher contribution limits than IRAs.