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What are the advantages of a 401(k) plan vs. a traditional IRA?
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The primary advantage of a 401(k) plan over a traditional IRA is the higher contribution limits, which can be up to $19,500 for individuals under 50 and up to $25,000 for those 50 or older in 2019. Additionally, 401(k) plans offer tax-deferred growth, meaning your contributions won't be taxed until you withdraw them in retirement, whereas traditional IRAs are taxed upon withdrawal. Another benefit of 401(k)s is that employers may match some or all of an employee's contributions, while traditional IRAs do not provide any matching funds. Finally, 401(k)s often have more investment options than traditional IRAs.