401(k) vs IRA Calculator 2026

Employer match or lower fees? Compare your retirement options and find the most profitable strategy.

Your Details

$
$
%

Free money from your employer (401k only)

Balance at Age 65

401(k) Path
$1,424,612
IRA Path
$1,352,585

Winner: 401(k) by $72,027

🔍 401(k) Breakdown

  • Your Annual Contrib:$10,000
  • + Employer Match:$2,250
  • Total Annual Invest:$12,250
  • Impact of 0.8% fee included.

🌱 IRA Breakdown

  • IRA Contrib (Limit):$7,000
  • Taxable/Other Acc:$3,000
  • Total Annual Invest:$10,000
  • No employer match. Lower fee (0.1%) applies.
*Assumes 7% annual return. Inflation not adjusted. IRA path assumes "No Match" available.
1

How This Comparison Works

We project the future value of your retirement savings in both accounts. The key differentiator is often the employer match (free money) for the 401(k) versus the wider investment choices and potentially lower fees of an IRA.

2

Methodology

Our specific projection methodology ensures a fair apple-to-apples comparison.

Compound Growth Formula

Future Value is calculated using annually compounded interest: $$FV = P \times (1 + r)^n + PMT \times \frac{(1 + r)^n - 1}{r}$$ Where $r$ is the annual rate of return minus fees, and $PMT$ is the annual contribution.

Order of Operations

For the 401(k) scenario, we assume you contribute enough to get the full employer match first, adding free money to your principal. For the IRA scenario, we assume no match is available (unless you split contributions).

401(k) vs IRA Calculator 2026

Compare your 401(k) and IRA investment options. See how employer matching, fees, and contribution limits affect your retirement wealth.

The Golden Rule of Retirement Saving

Most financial advisors recommend this 'Waterfall' strategy: 1. Contribute to **401(k)** up to the Employer Match (Free Money). 2. Max out your **IRA** (Lower fees, more choices). 3. Return to **401(k)** to finish maxing it out. 4. Taxable Accounts.

401(k) vs IRA: At a Glance

Feature401(k)IRA (Individual Retirement Account)
Contribution Limit (2026)$23,000$7,000
Catch-Up Limit (50+)+$7,500+$1,000
Employer MatchYes (Usually)No
Investment OptionsLimited (Plan Menu)Unlimited (Stocks, ETFs, etc.)
FeesPlan Admin Fees applyOften $0 at major brokerages

Common Questions

Q:Should I choose a 401(k) or IRA?

You often shouldn't choose just one. The best strategy is usually to get your employer match in the 401(k) first, then fund an IRA for better investment options and lower fees.

Q:Can I have both a 401(k) and an IRA?

Yes! You can contribute to both in the same year, as long as you earn enough income. The limits ($23,000 for 401(k) and $7,000 for IRA) are separate.

Q:What if my employer doesn't offer a match?

If there is no match, the IRA is often the better first choice because it typically offers lower fees and thousands of investment options, whereas 401(k)s often have a limited menu of funds.
Vercalc Expert Team
Vercalc Expert Team
US Retirement Specialists

Our team tracks the latest IRS regulations and contribution limits to provide accurate, up-to-date retirement planning tools.

Sources & References