Retirement
401(k) vs. IRA: Maximizing Your Retirement Savings
Learn the key differences between 401(k)s and IRAs to optimize your retirement savings strategy.
Understanding 401(k) Plans
A 401(k) is an employer-sponsored retirement plan. In 2026, you can contribute up to $23,500 ($31,000 if over 50). Many employers offer matching contributions—free money you shouldn't leave on the table.
Traditional vs. Roth IRA
IRAs offer more investment choices than most 401(k)s. Traditional IRAs offer tax-deductible contributions, while Roth IRAs provide tax-free withdrawals in retirement.
The Optimal Strategy
First, contribute enough to your 401(k) to get the full employer match. Then max out a Roth IRA. Finally, return to your 401(k) to contribute more if you can.