Both are tax-advantaged retirement accounts, but they work differently. Here's how to think about them.
The 401(k)
Offered through your employer. Contributions come straight from your paycheck before tax, and many employers match part of what you put in — effectively free money. Contribution limits are high, making it powerful for building savings fast.
The IRA
An Individual Retirement Account you open yourself at a broker. Contribution limits are lower, but you get more investment choice and control. It comes in Traditional and Roth versions.
Which first?
A common order: contribute to your 401(k) at least enough to get the full employer match, then fund an IRA, then return to the 401(k) for additional savings. Always capture the match first — it's an instant return you can't beat elsewhere.
Include the match in your plan
When using the calculator, add your employer match into your monthly contribution to see its full long-term impact.