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401(k) vs IRA — after-tax retirement value
A $10,000 annual contribution at 7% for 30 years, taxed at 22% when you retire. The 401(k) adds your employer match on top; the IRA does not. Enter your numbers below.
★ MONEY · RETIREMENT · COMPARISONS
401(k) vs IRA Calculator: Which Account Wins in 2026?
$10,000 a year at 7% for 30 years becomes $1,416,911.85 in a 401(k) with a 50% employer match — and $944,607.90 in an IRA. After 22% tax at retirement, the 401(k) wins by $368,397.08. The whole gap is the match.
How the 401(k) vs IRA comparison works
A traditional 401(k) and a traditional IRA are the same kind of account in the ways that matter here: you put pre-tax money in, it grows tax-deferred, and you pay income tax on the whole balance when you withdraw it in retirement. The two differences are who adds money and how much room you get. The 401(k) is a workplace plan, and many employers match part of what you put in — free money the IRA never gets. The 401(k) also has far more contribution room: in 2026 you can defer $24,500 into a 401(k) against $7,500 into an IRA, if you are under 50 (IRS Notice 2025-67). This calculator holds the return and the tax bracket the same for both accounts and asks one question: what does the match do to the ending balance?
At the defaults — $10,000 a year, 30 years, 7% return, 22% bracket, 50% match — the 401(k) takes in $10,000 × 1.50 = $15,000 a year while the IRA takes in $10,000. The future-value factor for 7% over 30 years is ((1.07)^30 − 1) / 0.07 = 94.46079, so the 401(k) grows to $15,000 × 94.46079 = $1,416,911.85 and the IRA to $10,000 × 94.46079 = $944,607.90. After 22% tax at retirement, the 401(k) is worth $1,416,911.85 × 0.78 = $1,105,191.24 and the IRA is $944,607.90 × 0.78 = $736,794.16. The gap is $368,397.08, and it is exactly the match compounded: $5,000 a year × 94.46079 = $472,303.95 before tax, × 0.78 = $368,397.08 after tax.
The worked example, line by line
Setup: annual contribution $10,000; years 30; return 7%; tax bracket 22%; employer match 50%.
Line 1 — the future-value factor. F = ((1 + 0.07)^30 − 1) / 0.07 = (7.61226 − 1) / 0.07 = 94.46079. One dollar a year for 30 years at 7% becomes $94.46.
Line 2 — the 401(k) yearly in. $10,000 × (1 + 50/100) = $15,000.00 a year: your $10,000 plus the employer’s $5,000.
Line 3 — the 401(k) future value. $15,000 × 94.46079 = $1,416,911.85 before tax.
Line 4 — the IRA future value. $10,000 × 94.46079 = $944,607.90 before tax. No match, so the IRA starts $5,000 a year behind.
Line 5 — after tax at retirement. 401(k): $1,416,911.85 × (1 − 0.22) = $1,105,191.24. IRA: $944,607.90 × 0.78 = $736,794.16.
Line 6 — the gap. $1,105,191.24 − $736,794.16 = $368,397.08. The match’s $5,000 a year, compounded at 7% for 30 years, is $472,303.95 before tax and $368,397.08 after tax — the whole gap, to the dollar.
Every branch, checked
No match (0%): the 401(k) takes in $10,000 a year, exactly like the IRA, so both end at $736,794.16 after tax — a tie. The match is the only reason the 401(k) wins. If your employer does not match, choose on fees, fund choice, and whether you want a Roth option, not on the ending balance.
2026 max contributions: the 401(k) takes in $24,500 × 1.50 = $36,750 a year with a 50% match, against the IRA’s $7,500 (IRS Notice 2025-67: $24,500 and $7,500 for savers under 50). The 401(k) grows to $3,471,434.03 before tax and $2,707,718.55 after tax; the IRA grows to $708,455.93 before tax and $552,595.62 after tax. The gap is $2,155,122.92 — most of it is the contribution room ($24,500 vs $7,500), not the match.
37% bracket: the 401(k) is worth $1,416,911.85 × 0.63 = $892,654.47 after tax, and the IRA is $944,607.90 × 0.63 = $595,102.98. The 401(k) still wins by $297,551.49. A higher bracket shrinks both accounts by the same percentage, so it never changes the winner — it only makes the gap smaller in dollars.
10-year horizon: the factor for 7% over 10 years is ((1.07)^10 − 1) / 0.07 = 13.81645. The 401(k) grows to $15,000 × 13.81645 = $207,246.75 before tax, $161,652.46 after tax; the IRA grows to $138,164.50 before tax, $107,768.31 after tax. The 401(k) wins by $53,884.15 after only 10 years — the match matters from year one.
Reverse — where the gap comes from: set the match to 0% and both accounts end at $736,794.16 after tax. Every dollar of the $368,397.08 gap is the employer’s $5,000 a year, compounded. If your employer matches 100% instead of 50%, the yearly in is $20,000 and the after-tax gap doubles to $736,794.16.
What the defaults assume
Contributions go in at the end of each year, so the first year’s money compounds for 29 years, not 30 — the standard end-of-year annuity convention. Both accounts earn the same 7% every year, with no fees, no market crashes, and no withdrawals before retirement; a real portfolio would not grow in a straight line. Both accounts are traditional (pre-tax), so the whole balance is taxed at withdrawal at the bracket you enter — Roth accounts change the tax timing, not the match math, and the Roth note in the 401(k) vs IRA guide covers that. The match is assumed to vest immediately and to be paid every year; real plans often vest over 3–6 years, and some cap the match at a percentage of your salary. The 2026 limits are $24,500 (401(k)) and $7,500 (IRA) for savers under 50, per IRS Notice 2025-67; catch-ups are $8,000 and $1,100 at 50+. Rounding convention: money is rounded to cents and all figures are computed from unrounded values, rounded only for display.
Output · formula · meaning
| Output | Formula | What it means |
|---|---|---|
| Future-value factor | ((1+r)^n − 1)/r, r = 7%, n = 30 | 94.46079 — $1 a year for 30 years at 7% becomes $94.46. |
| 401(k) yearly in | contribution × (1 + match/100) | $15,000.00 a year: your $10,000 plus the $5,000 match. |
| IRA yearly in | contribution | $10,000.00 a year. No match. |
| 401(k) future value | $15,000 × 94.46079 | $1,416,911.85 before tax. |
| IRA future value | $10,000 × 94.46079 | $944,607.90 before tax. |
| 401(k) after tax | FV × (1 − 22%) | $1,105,191.24 at retirement. |
| IRA after tax | FV × (1 − 22%) | $736,794.16 at retirement. |
| Gap | 401(k) after tax − IRA after tax | +$368,397.08 — the 401(k) wins. |
| No match (0%) | same formulas, match 0% | $736,794.16 each — a tie. |
| 2026 max | 401(k) $24,500 × 1.50 vs IRA $7,500 | $2,707,718.55 vs $552,595.62; gap $2,155,122.92; FVs $3,471,434.03 vs $708,455.93. |
| 37% bracket | FV × (1 − 37%) | $892,654.47 vs $595,102.98; gap $297,551.49. |
| 10-year horizon | factor 13.81645, same formulas | $161,652.46 vs $107,768.31; gap $53,884.15; FVs $207,246.75 vs $138,164.50. |
| Reverse: no match | match 0% → both accounts equal | $736,794.16 each — the gap is all match. |
Who uses this
- The new hire choosing where to save: is offered a 401(k) with a 50% match and wonders whether to open an IRA instead, and learns the 401(k) ends $368,397.08 ahead after tax — so they take the match first and open the IRA second.
- The saver whose employer does not match: runs the numbers at 0% and learns both accounts end at $736,794.16 — a tie — so they choose on fees and fund choice instead, and the IRA’s wider menu wins.
- The high earner in the 37% bracket: worries the tax will eat the advantage, and learns the 401(k) still wins by $297,551.49 — because the tax hits both accounts equally, the match survives any bracket.
- The late starter with 10 years left: thinks the match is too small to matter over a decade, and learns the 401(k) still wins by $53,884.15 — so even 10 years of free money is worth taking.
Accuracy & limitations
The math is exact for the numbers you enter: the future-value factor is ((1+r)^n − 1)/r, the 401(k) yearly in is the contribution times one plus the match, and after-tax value is the future value times one minus the bracket. What the model cannot do is predict the return: a real portfolio does not earn 7% every year, and a bad decade early on hurts more than a bad decade late. It also assumes the match vests immediately and is paid every year, ignores fees (a 1% annual fee would cut the 30-year ending balance by roughly a quarter), and ignores the 10% early-withdrawal penalty and required minimum distributions. The 2026 limits are $24,500 and $7,500 for savers under 50 (IRS Notice 2025-67). Read the Roth vs traditional IRA calculator for the Roth version of this choice, and the 401(k) contribution calculator for what your paycheck can actually fund.
Cite this calculatorBright Side Kit. “401(k) vs IRA Calculator: Which Account Wins in 2026?” brightoolbox.com, 2026. Method: FV factor = ((1+r)^n − 1)/r; 401(k) yearly in = contribution × (1 + match/100); IRA yearly in = contribution; after-tax = FV × (1 − bracket/100). Source: IRS Notice 2025-67 — 2026 limits $24,500 (401(k)) and $7,500 (IRA) for savers under 50; catch-ups $8,000 and $1,100 at 50+. Defaults: $10,000/yr, 30 yr, 7%, 22%, 50% match → factor 94.46079, 401(k) FV $1,416,911.85, after-tax $1,105,191.24; IRA FV $944,607.90, after-tax $736,794.16; gap $368,397.08; no match → tie at $736,794.16; 2026 max ($24,500 + 50% vs $7,500) → 401(k) FV $3,471,434.03, after-tax $2,707,718.55 vs IRA FV $708,455.93, after-tax $552,595.62, gap $2,155,122.92; 37% bracket → $892,654.47 vs $595,102.98, gap $297,551.49; 10-year horizon → factor 13.81645, 401(k) FV $207,246.75, after-tax $161,652.46 vs IRA FV $138,164.50, after-tax $107,768.31, gap $53,884.15.
Bright Side Kit. "401(k) vs IRA Calculator: Which Account Wins in 2026?" https://brightoolbox.com/401k-vs-ira/ Accessed October 24, 2026.Frequently asked questions
Does the 401(k) always beat the IRA?
No — only because of the match. At the defaults the 401(k) wins by $368,397.08 after tax, but with no match the two accounts tie exactly at $736,794.16. Same contribution, same return, same tax at withdrawal: the match is the whole difference.
How much is the employer match worth over 30 years?
$368,397.08 after tax. A 50% match on $10,000 a year is $5,000 a year of free money. Compounded at 7% for 30 years that is $472,303.95 before tax, and $368,397.08 after a 22% bracket. That is the entire gap between the two accounts.
What are the 2026 contribution limits?
401(k) $24,500 and IRA $7,500, if you are under 50. Those are the IRS limits for 2026 (IRS Notice 2025-67). Catch-ups at 50+ add $8,000 to the 401(k) and $1,100 to the IRA. At the 2026 maximums the 401(k) ends $2,707,718.55 after tax against the IRA’s $552,595.62.
What if my employer does not match?
Then it is a tie — both end at $736,794.16 after tax. Choose on fees, fund choice, and flexibility instead. An IRA usually has lower fees and a wider fund menu than a 401(k), and a Roth IRA has no required minimum distributions.
Does a higher tax bracket change the winner?
No. At a 37% bracket the 401(k) is $892,654.47 after tax and the IRA is $595,102.98 — the 401(k) still wins by $297,551.49. The tax hits both accounts by the same percentage, so the bracket shrinks the gap in dollars but never flips the winner.
What if I only have 10 years to retirement?
The 401(k) still wins by $53,884.15. Over 10 years the 401(k) reaches $161,652.46 after tax against the IRA’s $107,768.31. The match matters from year one — it does not need 30 years to work.
Should I max out the 401(k) or the IRA first?
Get the full match first, then the IRA, then back to the 401(k). The match is a guaranteed 50% return on day one, which no investment beats. After the match, the IRA’s lower fees and wider fund choice usually win — and the 401(k)’s bigger room ($24,500 vs $7,500 in 2026) matters only once you are saving more than $7,500 a year.
What about a Roth 401(k) or Roth IRA?
Roth changes the tax timing, not the match math. You pay tax now and withdraw tax-free later, so the bracket that matters is today’s, not retirement’s. The match still goes to the 401(k), and it still wins by the same logic. Run the Roth vs traditional IRA calculator for that version of the choice.