Comparison
401(k) vs IRA
This is rarely either-or. Contribute to the 401(k) at least up to the full employer match, then use an IRA for the flexibility and lower fees, then return to the 401(k) if you still have capacity.
Option A
Employer 401(k)
In favour
- Employer match is an immediate guaranteed return
- Much higher annual contribution limit
- Contributions come straight out of payroll
- Creditor protection under federal law
Against
- Investment menu is chosen by your employer
- Fees vary and are not always visible
- Vesting schedules can delay ownership of the match
vs
Option B
Individual IRA
In favour
- Choose any investment you like
- Usually far lower fees
- Roth option available at many providers
- Stays with you regardless of employer
Against
- Much lower annual contribution limit
- No employer match
- Deductibility phases out at higher incomes if you also have a workplace plan
Settle it
401(k) & Employer Match Calculator
employer match = salary × min(your %, match cap %) × match rate
Estimates, not advice. Every figure here is produced from the inputs you enter and the formula printed on the page. Rules differ by state, carrier, lender and contract, so use these numbers to prepare for a conversation with a qualified professional rather than to replace one. See our full disclaimer.