Can I contribute to both a 401(k) and an IRA in 2025?

Yes. The 401(k) limit ($23,500) and the IRA limit ($7,000) are completely separate, so you can max both in the same year — up to $30,500 combined before catch-ups. Your ability to *deduct* a Traditional IRA contribution may phase out if you're covered by a workplace plan and earn above the IRS threshold, but you can still contribute.

Should I use a 401(k) or an IRA first?

A common order: (1) 401(k) up to the full employer match, (2) an IRA — often a Roth — for its wider investment choice, (3) back to the 401(k) to use its much larger $23,500 limit. The match is the deciding factor — it's free money that no IRA offers.

What are the 2025 contribution limits for a 401(k) vs an IRA?

For 2025 the 401(k) employee limit is $23,500 (+$7,500 at age 50+, +$11,250 at ages 60–63). The IRA limit is $7,000 (+$1,000 at age 50+). The 401(k) limit is more than three times larger and can also receive an employer match. Source: IRS Notice 2024-80, verified 2026-06-18.

Why use an IRA at all if the 401(k) limit is bigger?

Investment choice and the Roth option. A 401(k) restricts you to your employer's fund menu, which can be limited or expensive; an IRA lets you pick almost any fund or ETF at the broker of your choice. A Roth IRA also gives tax-free growth and has no required minimum distributions for the original owner.

What is the 401(k) vs IRA: Which Retirement Account First? (2025 Limits)?

Bigger limit and a match vs a wider investment menu — compare a 401(k) against a Traditional and Roth IRA with the real 2025 IRS numbers. It runs free in your browser on Gera Tools, with nothing uploaded.

401(k) vs IRA: Which Retirement Account First? (2025 Limits)

Name: 401(k) vs IRA: Which Retirement Account First? (2025 Limits)
Creator: Gera Tools
License: https://creativecommons.org/licenses/by/4.0/

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401(k) vs IRA

A 401(k) and an IRA are not either/or — most people should use both, in a specific order. The 401(k) wins on size ($23,500 in 2025 vs the IRA’s $7,000) and the employer match; the IRA wins on investment choice and, for the Roth, tax-free growth with no income-tax deduction. This page compares a 401(k) against a Traditional and Roth IRA so you can see which dollar belongs where.

The table below compares each account on the rows that actually differ — the 2025 IRS contribution limits, catch-ups, employer match, income limits, early-withdrawal rules and required minimum distributions. It runs in your browser; nothing is sent to any server.

2025 limits used: 401(k)/403(b)/457(b) employee deferral $23,500 (+$7,500 at 50+, +$11,250 at 60–63); IRA $7,000 (+$1,000 at 50+); Roth IRA MAGI phase-out single $150,000–$165,000, MFJ $236,000–$246,000. Source: IRS Notice 2024-80 + IRS Newsroom IR-2024-285, verified 2026-06-18. Always confirm the current year’s figures at irs.gov.