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One advantage of the 401k plan is that its payroll deductions are automatic and painless. The funds accumulate with little effort on your part. Other investments can work just as well, but they require discipline to make sure they happen. Some can be automatic with regular deductions from your checking account, but those are not common.

On your mutual funds vs the S&P comment, many 401ks have S&P 500 Index funds as one of their investment choices. You will want to check expense ratio and performance as some are expensive, but often you can choose an index fund to avoid the problems of managed funds, which tend to be expensive and under perform.

As Fuskie mentioned, Roth IRA is a reasonable alternative. But lower contribution limits make it difficult to accumulate the sums you need to retire on in a Roth with contributions alone. A rollover from a 401k can often be much larger.

No one knows how future tax laws will change, but for now investing in a taxable account in the long term buy and hold style (LTBH) is a decent alternative. You pay taxes only when you sell and then at capital gains rates. As 401k eventually gets taxed at ordinary income tax rates, some see LTBH as a better deal (if you have the skill to choose investments you can hold long term and the discipline to fund the program regularly).
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