401(k) vs Roth IRA Calculator
Compare your 401(k) and Roth IRA side by side — with employer match, compound growth, and after-tax income
General
Applied to 401(k) withdrawals only — Roth is tax-free
401(k) — Traditional
100 = dollar-for-dollar
Roth IRA
2025 limit: $583/mo ($7,000/yr)
Balance at retirement
$1,482,626
Balance at retirement
$593,699
Combined Portfolio
Total Balance at Retirement
$2,076,326
401(k) + Roth IRA combined
After-Tax Monthly Income
$5,834
4% rule, taxes applied
Inflation-Adjusted
$2,458
in today's purchasing power
Growth Over Time
Your employer adds $175/month to your 401(k) — that's $73,500 in free money over 35 years.
For estimation purposes only. This calculator assumes consistent contributions, a fixed return rate, and a simplified tax model. Actual results vary by market performance, fees, income changes, and tax law. Roth IRA eligibility phases out at higher incomes ($146k–$161k single, $230k–$240k married for 2025). Consult a licensed financial advisor.
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401(k) vs Roth IRA: The Core Difference
A traditional 401(k) uses pre-tax dollars — you don't pay income tax on contributions today, but you pay ordinary income tax on every withdrawal in retirement. A Roth IRA flips this: you contribute after-tax dollars now, but all growth and withdrawals in retirement are completely tax-free. The "better" choice depends almost entirely on whether your tax rate will be higher now or in retirement.
When Roth IRA Wins
If you're early in your career with a lower income today, Roth IRA is usually the better choice. You pay tax now at a low rate and let decades of compound growth accumulate completely tax-free. Young professionals in the 22% or lower bracket especially benefit. Additionally, Roth IRAs have no required minimum distributions (RMDs), giving you more flexibility in how and when you access your money.
When 401(k) Wins
If you're in a high tax bracket now and expect to be in a lower bracket in retirement, the traditional 401(k) wins — you defer taxes from a high rate today to a lower rate later. The 401(k) also has a much higher contribution limit ($23,500 vs $7,000 for Roth IRA in 2025) and always includes employer matching, which Roth IRAs do not. For high earners, Roth IRA contributions are phased out entirely above certain income thresholds.
The Smart Strategy: Use Both
Most financial planners recommend contributing enough to your 401(k) to capture the full employer match first — that's an instant guaranteed return. Then, if eligible, max out your Roth IRA for tax diversification. Having both accounts gives you flexibility in retirement to draw from taxable and tax-free sources strategically, minimizing your total tax burden across your retirement years.
2025 Contribution Limits
For 2025, the 401(k) employee contribution limit is $23,500/year ($1,958/month), with a $7,500 catch-up for those 50 and older. The Roth IRA limit is $7,000/year ($583/month), with a $1,000 catch-up for those 50+. Roth IRA contributions phase out between $146,000–$161,000 for single filers and $230,000–$240,000 for married filing jointly.
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