Wealth with Intention
Money Wisdom for Your Next Chapter
Roth IRA vs. 401(k) in 2026: Differences, Limits, and How to Choose
By Leah Hadley, AFC®, CDFA®. Last updated September 2026 with the current IRS limits.
Whether you're starting a new job that offers retirement savings options, or you're looking into managing your investments yourself, it's easy to get overwhelmed. If investment lingo feels too far beyond your wheelhouse, learning the difference between a Roth IRA and a 401(k) is a good place to start. Let's work through what each account is, how to use it, and the pros and cons of each. Spoiler alert. Some people are eligible to use both.
The short version. A 401(k) is an employer plan with a much higher 2026 limit ($24,500) and often an employer match. A Roth IRA is an account you open yourself, with a lower limit ($7,500) but more investment choices and tax-free withdrawals in retirement. If you can, use both. Start by capturing your full employer match, then compare what else fits your goals.
Roth IRA vs. 401(k) at a Glance
| 401(k) | Roth IRA | |
|---|---|---|
| How you get one | Through an employer that off | ...
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Leah Hadley, AFC®, CDFA®, MAFF®
Founder/Senior Wealth Manager
Leah Hadley is the founder of Intentional Wealth Partners and Intentional Divorce Solutions, sister companies based in Cleveland and serving clients nationwide. Intentional Wealth Partners provides financial planning and wealth management. She specializes in helping women and couples navigate major life transitions with confidence and clarity. She is also the author of Intentional Money: The Modern Woman's Guide to Building Wealth, Purpose, and Peace, host of the "Intentional Divorce Insights" podcast, and a sought-after speaker.
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