401(k) vs IRA
A 401(k) and an IRA are both tax-advantaged retirement accounts, but they are different kinds of vehicles. A 401(k) is a workplace plan: contributions come out of your paycheck as salary deferrals, the employer often adds match dollars, and the plan sets the investment menu and rules. An IRA is an individual account: you choose the provider, contribute money yourself, and control the investments. This comparison walks through how the two calculators model each structure so you can pick the right tool for the question you are actually asking.
This page is informational, not financial or tax advice. Contribution limits, catch-up rules, compensation limits, plan eligibility, vesting schedules, and withdrawal rules differ between 401(k) plans and IRAs, and they change. Check current IRS guidance and your plan’s summary plan description before making decisions.
What each calculator does
The 401(k) calculator is built around the employer-plan structure. It projects a traditional 401(k) balance from your salary, the percentage you defer, the employer’s match rate and match limit, your current balance, and your expected annual return. It compounds employee and employer contributions monthly and shows an after-tax withdrawal value using the retirement tax rate you enter.
The IRA calculator models an individual traditional IRA. It grows your current balance and annual contribution with monthly compounding, shows investment growth, values a current-year deduction, and applies a retirement tax rate to produce an after-tax withdrawal estimate.
Side-by-side comparison
| Feature | 401(k) calculator | IRA calculator |
|---|---|---|
| Who offers the account | Workplace plan | Individual provider |
| Contribution source | Salary deferral percentage | Annual contribution you enter |
| Employer match | Modeled with rate and match limit | Not modeled |
| Contribution limit | Not enforced; verify IRS limits | Not enforced; verify IRS limits |
| Tax model | Traditional pre-tax with after-tax withdrawal estimate | Traditional pre-tax with deduction value and after-tax withdrawal estimate |
| Compounding | Monthly | Monthly |
| Plan-specific rules | Vesting, eligibility, loans vary by plan | Provider rules, deductibility phaseouts apply |
When to use which
The most powerful lever in a 401(k) is the employer match — it is immediate, guaranteed money on top of your own savings. In the calculator’s own example, a 50 percent match up to 6 percent of salary on a 5 percent deferral adds 2.5 percent of salary in employer dollars, and the match stops growing once your contribution exceeds the plan’s match limit. For that reason, many households prioritize contributing enough to capture the full match before other savings, but the right order depends on plan fees, investment options, vesting, and your cash flow.
Use the 401(k) calculator when you are projecting a workplace plan with a match formula or comparing contribution percentages. Use the IRA calculator when you are planning individual retirement contributions, want to see the deduction value, or are weighing an IRA against a 401(k) for the portion of savings above the match. If you are comparing account types, remember that the two calculators model the same traditional tax structure — compare after-tax withdrawal estimates and account-level features, not just projected balances.
Where to start
- 401(k) calculator — workplace plan with salary deferrals, employer match, and after-tax withdrawal estimate.
- IRA calculator — individual traditional IRA with deduction value and after-tax withdrawal estimate.
Informational note: This page is an educational comparison, not financial, tax, or legal advice. IRS elective deferral limits, IRA contribution limits, catch-up rules, compensation limits, and plan testing rules change, and 401(k) features vary by employer. Confirm current limits and your plan documents before relying on any projection.