401(k) vs IRA: Which Retirement Account Wins in 2026?

The short answer

A 401(k) with a 50% employer match beats an IRA by $368,397.08 after tax over 30 years: $10,000 a year at 7% grows to $1,416,911.85 in the 401(k) and $944,607.90 in the IRA, and after 22% tax at retirement they are worth $1,105,191.24 and $736,794.16. But the match is the whole story. Without it, the two accounts tie exactly at $736,794.16, because a traditional 401(k) and a traditional IRA are the same deal in every other way: pre-tax money in, tax-deferred growth, income tax on the whole balance when you take it out. So the real question is whether your employer matches, how much room each account gives you, and what the fees look like.

The verdict, line by line

Start with the future-value factor: at 7% over 30 years, one dollar a year becomes ((1.07)^30 − 1) / 0.07 = 94.46079 dollars. The 401(k) takes in $10,000 × 1.50 = $15,000 a year — your $10,000 plus the employer’s $5,000 — and grows to $15,000 × 94.46079 = $1,416,911.85. The IRA takes in $10,000 a year and grows to $944,607.90. After 22% tax, the 401(k) is $1,105,191.24 and the IRA is $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. Change any input and the verdict moves with it: with no match the gap is zero; at a 37% bracket it is $297,551.49; over only 10 years it is $53,884.15.

The match is free money

A 50% match is a guaranteed 50% return on the day the money goes in, before any market return at all. You put in $10,000, your employer adds $5,000, and you have $15,000 working for you from day one — no investment on earth offers that. Over 30 years that $5,000 a year becomes $472,303.95 before tax and $368,397.08 after tax, which is more than a third of the 401(k)’s entire ending balance. The usual advice is to contribute at least enough to get the full match before saving anywhere else: skipping the match to fund an IRA instead is turning down a 50% return to chase lower fees. The match does have fine print. Many plans vest over three to six years, so if you leave early you may forfeit part of it, and some cap the match at a percentage of your salary.

The 2026 limits

The second difference between the accounts is room. In 2026 you can defer $24,500 into a 401(k) if you are under 50, against $7,500 into an IRA (IRS Notice 2025-67). Catch-up contributions at 50+ add $8,000 to the 401(k) and $1,100 to the IRA, and the combined employee-plus-employer 401(k) limit is $72,000. At the 2026 maximums, with a 50% match, the 401(k) takes in $24,500 × 1.50 = $36,750 a year and grows to $3,471,434.03 before tax, $2,707,718.55 after tax; the IRA takes in $7,500 and grows to $708,455.93 before tax, $552,595.62 after tax. The gap at the maximums is $2,155,122.92 — and most of it is the room, not the match, because $24,500 is more than three times $7,500.

The Roth note

Everything above is about traditional accounts, where you pay tax at withdrawal. A Roth 401(k) or Roth IRA flips the timing: you pay tax now, at today’s bracket, and withdraw tax-free in retirement. The match math does not change — the employer match still goes to the 401(k), and it still wins by the same logic — but the bracket that matters becomes today’s instead of retirement’s. If your bracket is lower now than it will be in retirement, Roth wins: a 22% bracket today against a 37% bracket later is a 15-point saving on every dollar. The Roth IRA has two extra advantages: there are no required minimum distributions in your lifetime, and you can withdraw your contributions (not the earnings) at any time without tax or penalty. The Roth IRA also has income limits — in 2026 the phase-out starts at $153,000 for single filers — while the Roth 401(k) has none.

Three mistakes

The first mistake is leaving the match on the table. Workers who contribute 3% when the full match needs 6% are giving up a 50% return on the missing 3% — over 30 years that is hundreds of thousands of dollars, and it is the most expensive mistake on this page. The second mistake is the reverse: maxing out the 401(k) before opening an IRA. A 401(k) with a 1% annual fee costs roughly a quarter of the ending balance over 30 years, and an IRA with a 0.1% fee keeps almost all of it — so once the match is captured, the IRA’s cheaper funds usually win until its $7,500 limit is reached. The third mistake is forgetting the tax bill. A $1,416,911.85 balance is not $1,416,911.85 of spending money: at a 22% bracket it is $1,105,191.24, and at 37% it is $892,654.47. Plan on the after-tax figure.

What the numbers leave out

The calculator is exact for the numbers you enter, but it simplifies a real retirement in four ways that matter. First, the return is not 7% every year: a real portfolio has good decades and bad ones, and a bad decade early on hurts more than a bad decade late, because there is less money compounding when it happens. Second, fees are ignored: a 1% annual fee cuts a 30-year ending balance by roughly a quarter, which is why the IRA’s cheaper funds matter once the match is captured. Third, the match is assumed to vest immediately and to be paid every year; real plans vest over years and sometimes cap the match. Fourth, the model ignores the 10% early-withdrawal penalty before age 59½ and required minimum distributions starting in your 70s. None of these change the verdict — the match still wins — but they change the size of the numbers.

The verdict

If your employer matches, take the 401(k) first: at a 50% match it ends $368,397.08 ahead after tax over 30 years, and even over 10 years it is ahead by $53,884.15. If your employer does not match, the two accounts tie at $736,794.16, so choose on fees and fund choice — and the IRA usually wins there. Once the match is captured, fund the IRA up to its $7,500 limit for the cheaper funds, then go back to the 401(k) for its $24,500 of room. And remember the edge cases: at a 37% bracket the 401(k) still wins by $297,551.49, because the tax hits both accounts equally, and at the 2026 maximums it wins by $2,155,122.92, because its room is more than three times the IRA’s. Run your own numbers in the 401(k) vs IRA calculator before you change your contributions.