401(k) vs Roth IRA
401(k) vs Roth IRA — Where Should Your First $20K Go?
Both are tax-advantaged. The choice comes down to your current tax rate, employer match, and future income expectations.
Verdict
Take the 401(k) match first (free money), then max the Roth IRA ($7,000 in 2026), then return to 401(k). If your employer offers no match, Roth IRA first.
Side-by-side comparison
Who should pick 401(k)
High earners in the 32%+ bracket who want a tax deduction now, anyone with a 401(k) employer match, and those expecting a lower retirement tax rate.
Who should pick Roth IRA
Younger workers in 12-24% brackets, anyone expecting higher future income, those wanting tax-free legacy money for heirs, anyone uncertain about future tax-law changes.
Related tools
Disclaimer. Comparison numbers depend on your tax bracket, state, and time horizon. Educational only — not personalized financial advice. See our Financial Disclaimer.
Goes deeper on this
Mega Backdoor Roth: The Tech Worker's Wealth Hack (2026 Edition)
There's a legal way for high earners to put an extra $30,000–$40,000 into a Roth every single year — on top of the normal 401(k) limit — and let it grow tax-free for life.
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