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What's the difference between a 401k, IRA, and a Roth IRA?
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The main difference between a 401k, an Individual Retirement Account (IRA), and a Roth IRA is the way they are taxed. A 401k or traditional IRA is funded with pre-tax dollars and therefore subject to income taxes when withdrawn. A Roth IRA is funded with post-tax dollars and therefore does not incur any taxes upon withdrawal.