Roth IRA vs Roth 401(k): Key Differences
Same tax treatment, different rules - contribution limits, income limits, and withdrawal flexibility compared
Both Roth accounts grow tax-free, but the Roth 401(k) allows $24,500/year (2026) vs $7,000 for the Roth IRA. The Roth IRA has income limits while the Roth 401(k) does not. Best strategy: use both.
Key Differences
- Contribution limit: Roth 401(k) $24,500 vs Roth IRA $7,000
- Income limit: Roth 401(k) none vs Roth IRA $150K-$165K single
- Withdrawal flexibility: Roth IRA contributions withdrawable anytime
- RMDs: Neither requires RMDs (SECURE Act 2.0 change for 401k)