401(k) vs IRA Calculator — Optimize Retirement Contribution Strategy

Optimize your 2026 retirement contributions across 401(k) and IRA. Captures employer match, catch-up limits, and tax savings.

Annual gross income

Age

yrs

Marginal tax rate

401(k) contribution

Your % of salary

Employer match %

Up to % of salary

e.g. "50% match up to 6% of salary" — fully captured at 6% deferral.

IRA contribution

Annual IRA contribution

IRA type

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How to use

1 Enter your annual gross income and current age.
2 Enter your employer 401(k) match formula (e.g., 50% of first 6%, 100% up to 4%, etc.).
3 Enter your federal marginal tax bracket and state income tax rate.
4 Click Calculate to see optimal contribution split: how much to put in 401(k) for full match, then Roth IRA max, then back to 401(k).
5 Adjust to match your cash flow constraints — even partial contributions to each tier beats not contributing.

2026 Contribution Limits

Account	Under 50	Age 50–59	Age 60–63 (super)
401(k) / 403(b) / 457(b)	$24,500	$32,500	$35,750
Roth IRA / Traditional IRA	$7,500	$8,600	$8,600
HSA self-only (HDHP)	$4,400	$4,400 + $1,000 catch-up	—
HSA family (HDHP)	$8,750	$8,750 + $1,000 catch-up	—
Total max for 50+ wage earner	—	$45,200+	$48,200+

Bogleheads Investment Priority Order

401(k) match — contribute enough to get full employer match. This is a 100% return — never leave it on the table.
HSA if eligible — triple tax advantage (deduct in, tax-free growth, tax-free out for medical). Best account in tax code.
Roth IRA max — flexibility, no RMDs, tax-free retirement.
401(k) additional contributions — up to the $24,500 limit.
Mega Backdoor Roth — if your 401(k) plan supports after-tax contributions and in-service rollovers/conversions, contribute up to $70,000 total in 2026.
Taxable brokerage — index funds, hold-forever stocks. Capital gains taxed at lower rates than ordinary income.

Why Match First Always

An employer 401(k) match is the highest guaranteed return available — typically 50-100% on the contribution dollars. A 50% match on $5,000 contribution = $2,500 immediate gain. Compare to S&P 500 average 10% annual return — match returns 5-10× more in year 1. Even at the lowest match rates (25%), you're beating any other investment available. Always contribute at least to the match maximum.

When to Pick Roth 401(k) vs Traditional 401(k)

If your employer offers Roth 401(k), apply the same logic as Roth IRA: choose Roth if currently in 10-22% tax bracket, Traditional if 32-37%. Many employers split the match — your contributions can be Roth, but match dollars typically go into Traditional. The total 2026 limit ($24,500) applies to combined Roth + Traditional 401(k) contributions.

FAQ

Q Should I max 401(k) before contributing to IRA?

No — common order is: (1) 401(k) match first (free money), (2) Roth IRA max, (3) 401(k) max remaining. Roth IRA offers more flexibility and investment options than most 401(k) plans, plus tax-free retirement income. Only after maxing Roth should you go back to 401(k) for additional contributions.

Q What is the 401(k) limit for 2026?

$24,500 base contribution. Catch-up at age 50: additional $8,000 ($32,500 total). New SECURE 2.0 super catch-up at age 60-63: additional $11,250 (total $35,750). Combined with employer match, total 401(k) annual addition limit is $70,000 (or $77,000 with regular catch-up).

Q How much should I save for retirement?

15% of gross income (including employer match) is the conventional target for adequate retirement savings. Higher savers (20-25%) reach financial independence faster. The CFPB and most retirement researchers note that starting at age 25 saving 15% gets to comfortable retirement; starting at 35 requires 20-25%; starting at 45 requires 30%+.

Q What is a Mega Backdoor Roth?

If your 401(k) plan allows (1) after-tax contributions beyond regular limits, and (2) in-service rollovers or in-plan Roth conversions, you can contribute up to $70,000/year in 2026 (or more with catch-up). Limited number of plans support this — check with your HR. When available, it's the largest tax-advantaged saving opportunity.

Q What if my employer doesn't offer a 401(k)?

Open your own retirement accounts: Roth IRA + Traditional IRA. If self-employed: SEP IRA (25% of net SE income, max $77,000), Solo 401(k) (same as regular 401(k) limits), or SIMPLE IRA. Don't skip retirement saving — the IRS gives equally generous limits to self-employed and small-business owners.

Q Can I contribute to both 401(k) and IRA in the same year?

Yes. The limits are completely separate. A worker over 50 can contribute up to $32,500 to 401(k) plus $8,600 to IRA = $41,100 of tax-advantaged space. Add HSA ($4,400 self-only or $8,750 family) and you're at $45,500-$49,850. High earners with employer Mega Backdoor Roth approach $80K+ tax-sheltered annually.

Q Should I leave money in my old employer 401(k) when I change jobs?

Usually no — roll it over to your new employer's 401(k) (if good investment options) or to a Traditional IRA (best flexibility). Old 401(k)s often have poor fund choices, high fees, or get lost. Indirect rollovers (60-day rule) have tax-trap risks; always do direct trustee-to-trustee transfer.

Q When does my 401(k) match vest?

Vesting schedules vary. Common: immediate vesting (your contributions always 100% yours; match yours 100% from day 1), graded vesting (20% per year over 5 years for match), or cliff vesting (0% until year 3, then 100%). Vested means it's yours to keep when you leave. ERISA caps vesting at 6 years.

Official resources

IRS — 401(k) Plan Contribution Limits

Authoritative IRS rules on 401(k) and other defined-contribution plan limits.

IRS — IRA Contribution Limits

IRS current contribution limits and rules for Traditional and Roth IRAs.

Bogleheads — Investment Priority

Bogleheads wiki on prioritizing tax-advantaged accounts in optimal order.

DOL — ERISA Vesting Rules

US Department of Labor ERISA rules on retirement plan vesting and protections.

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