Should I contribute to a 401(k) or a Roth IRA?

Usually both, in order: contribute to the 401(k) up to the full employer match, then fund a Roth IRA for tax-free growth, then return to the 401(k) to use its larger $23,500 limit. The match is guaranteed free money; the Roth gives tax-free withdrawals and no required minimum distributions for the owner.

What's the 2025 limit for a 401(k) vs a Roth IRA?

The 401(k) employee limit is $23,500 for 2025; the Roth IRA limit is $7,000 (both before catch-ups: +$7,500/$11,250 for the 401(k) and +$1,000 for the IRA). The Roth IRA also has an income limit — single MAGI phase-out $150,000–$165,000, married-filing-jointly $236,000–$246,000 — while the 401(k) has no income cap. Source: IRS Notice 2024-80, verified 2026-06-18.

Is a 401(k) or Roth IRA better for taxes?

It depends on whether your tax rate will be higher now or in retirement. A traditional 401(k) (deduct now, taxed later) wins if your retirement rate is lower; a Roth IRA (taxed now, tax-free later) wins if your retirement rate is higher or equal. Many people split across both to hedge. The break-even calculator on this page shows the after-tax difference for your own numbers.

Can I have both a 401(k) and a Roth IRA?

Yes, as long as you're under the Roth IRA income limit. The two limits are separate, so you can contribute up to $23,500 to the 401(k) and $7,000 to the Roth IRA in the same year. Many 401(k) plans also offer a Roth 401(k) option, which has no income limit if you prefer the Roth tax treatment with the larger contribution room.

What is the 401(k) vs Roth IRA: Pre-Tax Match or Tax-Free Growth? (2025)?

Match and a big pre-tax limit vs tax-free withdrawals and no RMDs — compare a traditional 401(k) against a Roth IRA with the real 2025 IRS rules. It runs free in your browser on Gera Tools, with nothing uploaded.

401(k) vs Roth IRA: Pre-Tax Match or Tax-Free Growth? (2025)

Name: 401(k) vs Roth IRA: Pre-Tax Match or Tax-Free Growth? (2025)
Creator: Gera Tools
License: https://creativecommons.org/licenses/by/4.0/

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401(k) vs Roth IRA

A 401(k) and a Roth IRA pull in opposite tax directions. A traditional 401(k) deducts your contribution now and taxes it in retirement, with a big $23,500 limit and often an employer match; a Roth IRA takes after-tax dollars now and pays out 100% tax-free later, with a smaller $7,000 limit and an income cap. This page compares them side by side and includes an after-tax break-even calculator.

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.