Why a 401(k) Isn't the Wonderful Savings Tool You Think It Is

Many people save for their senior years in a 401(k) plan, and for different reasons. For one thing, a lot of employees get easy access to a 401(k) through work, and so it's easier to sign up for one of these accounts rather than have to go out and open an IRA.

Another benefit of 401(k)s is that they come with higher annual contribution limits than IRAs. Right now, savers under 50 can contribute up to $19,500 a year to a 401(k), whereas annual contributions for workers in that age range max out at $6,000 a year for IRAs. And for savers 50 and older, 401(k) limits currently sit at $26,000 a year, compared with $7,000 a year for IRAs.

But despite these perks, a 401(k) plan may not be your best bet when it comes to finding a home for your retirement savings. Here's why.

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Source Fool.com