401(k) vs Roth IRA
Compare 401(k) and Roth IRA contribution limits, employer match, taxes and withdrawals. See the 2026 IRS figures and explore both with free calculators.
A 401(k) is an employer-sponsored retirement plan; a Roth IRA is an individual retirement account. They have separate contribution limits and different eligibility rules. Tax treatment also depends on whether a workplace contribution goes to a pre-tax account or a designated Roth account. Comparing those choices requires more than comparing their balances.
How the accounts differ
| Feature | 401(k) | Roth IRA |
|---|---|---|
| How it is set up | Through an employer plan, subject to its eligibility and investment options. | An individual account with an eligible provider. |
| Tax on contributions | Pre-tax employee deferrals generally reduce current taxable income. Designated Roth contributions use after-tax dollars. | After-tax contributions that cannot be deducted. |
| 2026 regular contribution cap | $24,500 of employee elective deferrals, shared with applicable 403(b) deferrals. | $7,500, shared across traditional and Roth IRAs and limited by eligible compensation. |
| Catch-up contributions | Generally $8,000 at age 50+, or $11,250 for ages 60–63 in 2026, when permitted. | $1,100 at age 50+ in 2026, subject to IRA rules. |
| Employer match | May be offered under the employer's plan. Check the formula and vesting rules. | No workplace employer match in this personal-account projection. |
| Income eligibility | There is no Roth IRA-style income phase-out for participating in a 401(k). | Direct Roth IRA contributions can be reduced or disallowed based on modified AGI and filing status. |
| Withdrawals | Pre-tax withdrawals are generally taxable; designated Roth qualified distributions have separate requirements. | Qualified distributions are tax-free when the IRS requirements are met. |
A Roth IRA is different from a Roth 401(k)
“Roth” describes a tax treatment, so it can appear in both account names. A designated Roth 401(k) remains part of the employer's plan. Splitting employee contributions between pre-tax and Roth 401(k) accounts does not create a second employee deferral cap. A Roth IRA uses the separate IRA cap, shared with any traditional IRA contributions.
Employer contributions also require a separate check. They do not use the $24,500 employee deferral cap, but employee and employer additions are subject to the $72,000 overall plan limit for 2026, excluding eligible catch-up contributions. Use the 401(k) contribution calculator to separate your deferral from the match.
Compare contributions before comparing growth
Start with the amounts actually permitted by each account and the employer's plan. A pre-tax contribution and an after-tax contribution can have different effects on take-home pay. Two accounts with the same future balance can also have different tax treatment at withdrawal. These calculators show contribution and growth arithmetic; they do not calculate a complete after-tax retirement plan.
The Roth IRA growth calculator assumes a fixed annual contribution made at year-end and a constant return after fees. The 401(k) calculator includes paycheck amounts and employer match. Those timing assumptions differ, so align the inputs before comparing their outputs. Future limits, market returns, fees and your circumstances can change.
Can you use both accounts?
The two contribution limits are separate, so workplace-plan participation alone does not prevent a Roth IRA contribution. IRA eligibility still depends on taxable compensation and the Roth income rules. A calculator that projects a contribution is not evidence that the contribution is allowed. Check the current IRS rules, your plan documents and your own filing situation before using the projected amount as a payroll or account instruction.
For related workplace plans, see the 403(b) calculator and 457(b) calculator. The savings withdrawal calculator explores a different question: how a balance changes while you take regular withdrawals.
Sources and update date
Figures checked 2026-10-12: IRS 2026 retirement limits, IRS Roth IRA rules, and IRS comparison of Roth and pre-tax accounts. The comparison chart's older dollar figures are superseded here by the linked 2026 announcement.
Frequently Asked Questions
Is a Roth IRA the same as a Roth 401(k)?
No. A Roth IRA is an individual account with IRA contribution and income rules. A designated Roth 401(k) is an employer-plan account whose employee contributions share the workplace-plan deferral limit with pre-tax 401(k) contributions.
Can I contribute to a 401(k) and a Roth IRA in the same year?
Yes, if you satisfy the applicable rules. The workplace-plan deferral cap is separate from the combined traditional/Roth IRA cap. Roth IRA contributions are subject to compensation, income and filing-status requirements.
Does an employer match reduce the 401(k) employee deferral cap?
An employer match does not use the employee elective-deferral cap. Employee and employer contributions are subject to a separate total annual-additions limit, excluding eligible catch-up contributions.
This comparison is educational. It does not recommend an account, investment or tax strategy for your circumstances.