How is it fair that I can only contribute $5,500 to an IRA but employees who work for employers that offer 401(k)'s are allowed to contribute $17,500 to retirement each year?

Short answer: only a minority of people use all of their $5,500 allowance, so raising the amount would benefit a small number of people at a cost of billions in tax receipts. Source: http://www.ebri.org/publications/ib/index.cfm?fa=ibDisp&content_id=5068 <-- The average IRA contribution was $3.5k according to this research. Read on if you want a bit more food for thought... This is a microcosm of a bigger question, namely: why are corporations taxed differently to individuals? Now, there are lots of ideologues out there who will argue over the morality ("fairness") of this, but I will attempt to skirt this in favour of pragmatism. It all comes down to imbalances in power. If you want to live in a developed country, and want a steady job with a known salary, then you are sheltered from a great deal of risk. This has some upsides, such as being able to get a competitive mortgage, but the trade-off is that you have very little wiggle-room. The government doesn't produce any wealth, so their only way to pay for big infrastructure projects is through taxation, which is a nicer way of saying coercion. You pay your taxes, or you find somewhere else to live. This is where Corporations have the whip hand, I'm afraid. Capital is much easier to move than a house or a person, so the government needs to bend a little more if they want their money in the coffers. The 401(k) allowance is bigger than an IRA because it might encourage employers with deep pockets to match contributions. You, the individual, get taxed more, and so the IRA $5k is enough of an incentive to get you to save. This is tax efficient for everyone, and the government is relying on a wealthier future generation of pensioners who will pay more tax.

It's not fair, but then neither is one employer offering better healthcare or other benefits vs another. Retirement is a portion of your total compensation, which includes all the other fringe benefits. You must consider the TOTAL package when taking a job; to a certain extent, it's your fault for not taking this into account when you took the job.  The employer factored in cost of a 401(k) when making you the salary offer. For instance, taking a $65k job that offers a 401(k) plus 5% match is actually offering you quite a bit more than a $75k straight salary job, IF you consider saving for retirement a valuable goal.  If you decided to take the $75k job instead, it's not really OK to complain about the lack of retirement options, since you explicitly decided to take the job without the benefit.