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401k vs IRA: what's the difference?

Quick answer

A 401k is an employer-sponsored plan with higher contribution limits ($23,500 in 2026, plus $7,500 catch-up at 50+) and potential employer matching. An IRA is an individual account with lower limits ($7,000, plus $1,000 catch-up) but more investment choices. Most people benefit from contributing to both.

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