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What are the main differences between a Roth IRA and a 401k?
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The main difference between a Roth IRA and a 401(k) is that contributions to a Roth IRA are made with after-tax dollars, while contributions to a 401(k) are typically made with pre-tax dollars. Contributions to a Roth IRA are not tax-deductible, but withdrawals from the account are tax-free if certain requirements are met. Contributions to a 401(k) may be tax deductible depending on your income level. Withdrawals from a 401(k) before retirement age can result in taxes and penalties.