401(k) or IRA first

• 401(k), 403(b), and 457: $24,500. Catch-up at 50 and over: $8,000, or $11,250 at ages 60 to 63.
• IRA: $7,500. Catch-up at 50 and over: $1,100.
• Total 401(k) additions, including employer money and after-tax contributions: $72,000 plus catch-up.
• IRA deadline for 2026: April 15, 2027. 401(k) deferrals have to come out of 2026 paychecks.

• 401(k) up to the full employer match. A 50% match is a 50% return before the market does anything.
• HSA to the limit if you have a high-deductible plan: $4,400 self-only, $8,750 family.
• IRA to $7,500 if your 401(k) funds are expensive. Otherwise keep going in the 401(k).
• The rest of the 401(k), to $24,500.
• After-tax 401(k) contributions rolled to Roth, if the plan allows it, up to the $72,000 total.
• A taxable brokerage account.

The IRA wins on choice: any fund from any provider, with broad index funds under 0.10%. The 401(k) wins on the higher limit, payroll automation, and creditor protection. What decides it is what your plan charges. Find the expense ratio of the cheapest broad index fund in the plan and any administrative fee on your statement.

A plan with index funds under 0.10% and no separate fee: fill the 401(k) before the IRA. A plan with only active funds at 1% or more: get the match, max the IRA, then return to the 401(k) for what is left. In between, the bigger limit usually wins.

Example: $80,000 salary, single, employer matches the first 4% of pay. Contributing $3,200 to the 401(k) captures $3,200 of match. The next $7,500 goes to a traditional IRA if the plan's funds cost more than 1%, and back into the 401(k) if they cost less. Either way, at the 22% rate each $1,000 of pre-tax contribution cuts this year's federal tax by $220.

The IRA has strings the 401(k) does not. If you are covered by a workplace plan, the traditional IRA deduction phases out between $81,000 and $91,000 of MAGI for single filers and $129,000 to $149,000 for joint filers. Roth IRA contributions phase out from $153,000 to $168,000 single and $242,000 to $252,000 joint. Above those, a backdoor Roth (a non-deductible contribution converted to Roth) keeps the IRA in play. The 401(k) has no income limit.

Inside either account you usually get to pick. Go traditional if you are in the 24% bracket or higher now (taxable income over $105,700 single, $211,400 joint) and expect a lower rate later. That describes most people planning early retirement and Roth conversions. Go Roth if you are early in your career in the 10% or 12% bracket. One 2026 wrinkle: if you had more than $150,000 of FICA wages from your employer last year, your 401(k) catch-up contributions must be Roth.