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Why Are IRA Limits So Much Lower Than Those for 401(k)s?

It's not as crazy as it sounds, but the answer won't make you happy.

One of the questions I hear most frequently from colleagues is: Why are IRA limits so much lower than those for 401(k) plans? There is actually a good answer, but it never leaves people feeling good about our retirement system.

To be clear, the difference in the limits is unfair: People lucky enough to have a plan at work can contribute $19,000 in 2019 to fund their retirement, while those without a plan can only contribute $6,000. That doesn't even include the employer match (if there is one), which further increases the assets that workers with a 401(k) can save each year.