<prompt> Human: This question mightve been answered before, but I havent seen it or with this thought. My employer offers a401k with match. However the max legal personal contribution is far above what would max the employer contribution. A few coworkers are thinking of putting in the max legal personal contribution because right now its tax free! Right?However I heard that 401k withdrawals when youre of the right age is taken out as regular income. Which iirc is currently 20-33. Vs capital gains which is15If I just max out the employer contribution and then put what would be the rest into a few indexes, and leave it alone for the same years. I would pay regular income on the first part now, but only capital gains on the returns later. Right?So if I had 2grand, and I put 1 into 401k, the other I take as salary so now 750. And put that into the same indexes. And it grows for 30 years. Lets say the they both get to be 10 grand and 7.5 grand respectively. Id be almost surely paying more taxes on the 401k even in the long run because capital gains will almost always be less than actual salary. No?Ill also have the benefit that if I really need the money earlier. The personal investment would always be available. Or am I totally off base?EDIT: Ok, you all and a few others have convinced me that 401k is better than regular investment in the long term. However, I should have added that I have already maxed out my roth for the year.  <response>: No. In a taxable account you will pay tax on the dividends and capital gains distributions every year. In a 401k those grow tax-deferred. 