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For the most part you're correct, which is why it is such a good idea to participate in a 401k if your company offers one. If your company matches a portion of your contribution so much the better.

There are some scenarios for which the taxable account is better. Generally speaking you need a high tax rate that you assume will also be high when you withdraw the money, and a time period around 30 years or more.

However the typical assumption is that tax rates will be lower in retirement than during one's prime wage earning years. Furthermore one needs to look at total tax rate for withdrawals but marginal tax rate when investing. This means that only a very small number of people are better off investing in a taxable account instead of a 401k.

It's also worth considering the comparison between a Roth IRA and a 401k.

-Michael
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