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I think you're ok contributing to both an IRA and a 401(k). You just can't take the tax deduction for the IRA contribution...but you can still make the $2000 contribution each year. At least that's what I do....maybe I'm breaking the law too. (Naw!)

As to your second question....the benefit to the 401(k) no matter what, is that, I think, it grows tax free (until you withdraw it). The benefits of investing inside of a tax deferred program are most always the best outcome for relative novices like myself...since I don't take the time to closely monitor my other investments (those outside my 401(k)).
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