Roth IRA vs 401k Calculator

• Roth IRA or 401k — which is better?

  For most savers the answer is "both, in order." Contribute to your 401k up to the full employer match first — that is an immediate, guaranteed return no IRA can offer. Beyond the match, a Roth IRA often wins on tax-free growth, wider investment choice, and flexibility (you can withdraw your own contributions anytime), especially if you expect higher taxes in retirement. Once the Roth IRA is maxed, return to the 401k for its much higher limit. For example, $7,000 a year in a Roth IRA for 30 years at 7%, with your rate rising from 22% to 24%, can leave you about $13,700 ahead of an equivalent taxable-later account. One caveat: the Roth IRA's $7,500 limit is far below the 401k's $24,500, and Roth IRA eligibility phases out at higher incomes.

• Should I max my 401k or Roth IRA first?

  The common priority order is: first contribute to your 401k up to the full employer match, then max out your Roth IRA, then return to the 401k toward its limit. This captures the free match money first (the highest guaranteed return), then the Roth IRA's tax-free growth and flexibility, then the 401k's remaining tax-advantaged room. For example, on a $70,000 salary you might put 6% in the 401k to earn the match, contribute the $7,500 Roth IRA maximum, then push the 401k rate higher if budget allows. High earners who exceed the Roth IRA income limits often skip straight from the match to maxing the 401k. One caveat: this order assumes a decent match and mid-range tax bracket — without a match, or with very high income, maxing the 401k first for the deduction can make more sense.

• What's the difference between a Roth IRA and a 401k?

  A 401k is an employer-sponsored plan with a high $24,500 contribution limit for 2026, a possible employer match, and no income limit to participate; a traditional 401k also lowers your taxable income now. A Roth IRA is an individual account you open yourself, with a lower $7,500 limit, income-based eligibility limits, tax-free qualified withdrawals, far wider investment choice, and no lifetime required minimum distributions. In short, the 401k wins on scale and the match, while the Roth IRA wins on flexibility and tax-free growth. One caveat: the two are not mutually exclusive and serve different roles — most savers use the 401k for the match and high limits and the Roth IRA for flexibility — and a traditional 401k's withdrawals are taxed as ordinary income, unlike the Roth IRA's.

• Can I contribute to both a Roth IRA and a 401k?

  Yes — contributing to a workplace 401k does not stop you from also funding a Roth IRA, as long as your income is within the Roth IRA eligibility limits. Many savers do exactly this: using the 401k for the employer match and its high $24,500 limit, and the Roth IRA (up to $7,500, or $8,600 from age 50) for tax-free growth and flexibility. The two limits are entirely separate, so you can contribute the maximum to each in the same year. One caveat: the Roth IRA phases out at higher incomes, so above certain thresholds you can contribute only a reduced amount or nothing directly — though a "backdoor" Roth IRA contribution is sometimes available — while the 401k itself has no income limit at all.

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  Uses the current IRS contribution limits, penalty rules and RMD tables — updated for 2026.

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