Roth 401(k) and Roth IRA contributions both use after-tax dollars, but one is an employer-plan designated Roth account and the other is an individual retirement arrangement. In 2026 the IRS lists a $24,500 employee elective-deferral limit for 401(k) plans and a $7,500 combined IRA limit; Roth IRA eligibility can also be limited by modified AGI, while designated Roth 401(k) contributions have no income limit.
What roth 401k vs roth ira means
A Roth 401(k) is a designated Roth account inside an employer plan, while a Roth IRA is an individually opened retirement arrangement. This compares two Roth containers; Roth versus traditional compares when income tax is generally recognized.
| 2026 401(k) elective limit | $24,500 |
|---|---|
| 2026 combined IRA limit | $7,500 |
| Roth 401(k) example | $10,000 |
| Roth IRA example | $3,000 |
| Shared limit | None |
Roth 401(k) vs. Roth IRA: what is different if both use after-tax dollars?: worked numbers
A worker directs $10,000 to a Roth 401(k) and $3,000 to a Roth IRA. The amounts do not share one limit: the 401(k) contribution counts against the workplace elective-deferral limit and the IRA amount counts against the combined IRA limit. The Roth IRA deposit still requires taxable compensation and an income-eligibility check.
How to calculate roth 401k vs roth ira
Keep separate ledgers for workplace elective deferrals and IRA contributions. Compare plan investment choices, employer match rules, fees, access, and the applicable withdrawal rules before treating both labels as interchangeable.
Use related Calculatort tools when the inputs are known: 401(k) savings projection; retirement goal projection; fund-fee comparison.
Common mistakes
Do not assume after-tax means every distribution is qualified, combine the two annual limits, or assume an employer plan offers a Roth option.
Where the calculation stops
Plan terms, income, five-year rules, withdrawals, rollovers, employer match allocation, and tax law can change the suitable choice.
roth 401k vs roth ira: source and verification
The IRS says designated Roth accounts have no income limit and its 2026 contribution pages list separate workplace-plan and IRA limits. Read the named source. This source names the transaction-specific 2026 401(k) elective limit and the conditions that qualify it.
Use the result as a dated scenario
Recalculate the roth 401k vs roth ira case when its listed input changes.