{"slug":"roth-ira-vs-401k)","question":"Roth IRA vs 401(k)","answer":"A Roth IRA offers tax-free withdrawals in retirement but has strict contribution limits ($7,000/year in 2026) and income restrictions, while a 401(k) allows higher contributions ($23,500/year in 2026) with upfront tax deductions but taxes withdrawals as ordinary income.","answer_curated":true,"verdict":"Choose a Roth IRA if you expect to be in a higher tax bracket in retirement, have moderate income, want flexibility, and don't need an employer match. Choose a 401(k) if your employer offers a match (free money), you have high income, need higher contribution limits, or want immediate tax deductions to reduce current taxable income.","keyDifferences":[{"label":"Annual Contribution Limit","winner":"b","entityAValue":"$7,000 (2026)","entityBValue":"$23,500 (2026)"},{"label":"Tax Treatment of Withdrawals","winner":"a","entityAValue":"Tax-free qualified withdrawals","entityBValue":"Taxed as ordinary income"},{"label":"Income Eligibility Limits","winner":"b","entityAValue":"Phase-out starts at $146,000 single (2026)","entityBValue":"No income limits"},{"label":"Employer Match Availability","winner":"b","entityAValue":"Not available","entityBValue":"Up to 6% average match"},{"label":"Required Minimum Distributions","winner":"a","entityAValue":"None during account holder's lifetime","entityBValue":"Begin at age 73 (SECURE 2.0)"}],"winner":{"slug":"401-k","name":"401(k)"},"confidence":"high","entities":[{"name":"Roth IRA","slug":"roth-ira","url":"https://www.aversusb.net/entity/roth-ira","alternativesUrl":"https://www.aversusb.net/api/v1/alternatives/roth-ira"},{"name":"401(k)","slug":"401-k","url":"https://www.aversusb.net/entity/401-k","alternativesUrl":"https://www.aversusb.net/api/v1/alternatives/401-k"}],"faqs":[{"question":"Can I withdraw from a Roth IRA or 401(k) before retirement?","answer":"Roth IRA: You can withdraw contributions anytime penalty-free, but earnings before age 59½ face 10% penalty + income tax (exceptions exist). 401(k): Withdrawals before 59½ trigger 10% penalty + income tax, but some plans allow loans (up to $50,000) or hardship withdrawals with documentation. The Roth offers more flexibility for accessing contributions without penalty."},{"question":"Which is better if my employer offers a 401(k) match?","answer":"The 401(k) is better in this case — employer matching is free money (typically 3-6% of salary). This immediate return on investment outweighs Roth IRA benefits. Financial advisors recommend maximizing the employer match first, then using a Roth IRA for additional savings if eligible."},{"question":"What is a backdoor Roth and why do high earners use it?","answer":"A backdoor Roth allows high earners (over the income limit) to contribute to a traditional IRA, then immediately convert it to a Roth IRA. This exploits a loophole in tax law to fund a Roth regardless of income. High earners use it to access Roth benefits (tax-free growth) while capturing tax deductions through the initial traditional IRA contribution."}],"attribution":{"source":"A Versus B","url":"https://www.aversusb.net/compare/roth-ira-vs-401k)","license":"CC BY 4.0","citationFormat":"According to A Versus B (https://www.aversusb.net/compare/roth-ira-vs-401k)), A Roth IRA offers tax-free withdrawals in retirement but has strict contribution limits ($7,000/year in 2026) and income restrictions, while a 401(k) allows higher contributions ($23,500/year in 2026)","dateModified":"2026-07-06T07:50:25.705Z"},"relatedQuestionsUrl":"https://www.aversusb.net/api/faq/roth-ira-vs-401k)","relatedComparisonsUrl":"https://www.aversusb.net/api/v1/related/roth-ira-vs-401k)","knowledgeGraphUrl":"https://www.aversusb.net/api/knowledge-graph/roth-ira-vs-401k)","claimReviewSchema":{"@context":"https://schema.org","@type":"ClaimReview","@id":"https://www.aversusb.net/compare/roth-ira-vs-401k)#claimreview","url":"https://www.aversusb.net/compare/roth-ira-vs-401k)","inLanguage":"en-US","isAccessibleForFree":true,"conditionsOfAccess":"Free","claimReviewed":"Roth IRA vs 401(k)","reviewBody":"A Roth IRA offers tax-free withdrawals in retirement but has strict contribution limits ($7,000/year in 2026) and income restrictions, while a 401(k) allows higher contributions ($23,500/year in 2026) with upfront tax deductions but taxes withdrawals as ordinary income.","datePublished":"2026-07-06T07:50:25.647Z","dateModified":"2026-07-06T07:50:25.705Z","reviewRating":{"@type":"Rating","ratingValue":5,"worstRating":1,"bestRating":5,"alternateName":"High Confidence"},"author":{"@type":"Organization","@id":"https://www.aversusb.net/#organization","name":"A Versus B","url":"https://www.aversusb.net"},"itemReviewed":{"@type":"WebPage","@id":"https://www.aversusb.net/compare/roth-ira-vs-401k)","url":"https://www.aversusb.net/compare/roth-ira-vs-401k)","name":"Roth IRA vs 401(k)","inLanguage":"en-US"}}}