By Ziv Shay | Updated April 2026
Compare 401(k) vs IRA: contribution limits, tax benefits, employer matching, and investment options. Find out which retirement account is right for you in 2026.
| Feature | 401(k) | IRA |
|---|---|---|
| 2026 Contribution Limit | $23,500 ($31,000 if 50+) | $7,000 ($8,000 if 50+) |
| Employer Match | Yes (free money!) | No |
| Investment Options | Limited to plan offerings | Virtually unlimited |
| Tax Treatment | Pre-tax or Roth option | Traditional (pre-tax) or Roth |
| Fees | Often higher (plan admin fees) | Generally lower (you choose broker) |
| Loan Option | Yes (borrow from balance) | No |
| Best For | Employees with employer match | Additional savings / more control |
| 401(k) | IRA | |
|---|---|---|
| Max Annual Contribution | $23,500 | $7,000 |
| 30-Year Total Contributions | $705,000 | $210,000 |
| Account Value at 65 (7%) | $2,215,000 | $661,000 |
| With 50% Employer Match (3%) | +$330,000 in match value | N/A |
| Combined Potential | $2,545,000 | $661,000 |
First contribute enough to your 401(k) to get the full employer match. Then max out a Roth IRA. Then increase 401(k) contributions toward the max.
Yes! You can contribute to both. However, your Traditional IRA deduction may be limited if you also have a workplace 401(k) and earn above certain thresholds.
You can roll it over to an IRA (often the best option), leave it in the old plan, or transfer to your new employer's plan.
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