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What is the difference between an IRA and a 401k?
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The main difference between an IRA and a 401k is that IRAs are funded with pre-tax dollars, while 401ks are funded with post-tax money. With an IRA, contributions are made with after-tax income, meaning you can take advantage of tax deductions such as retirement savings plans or health savings accounts. With a 401k, contributions are made before taxes are taken out, so you pay taxes on your contributions when they are withdrawn in retirement.