A 401k is an employer-sponsored plan with higher contribution limits ($23,500 in 2026, plus $7,500 catch-up at 50+) and potential employer matching. An IRA is an individual account with lower limits ($7,000, plus $1,000 catch-up) but more investment choices. Most people benefit from contributing to both.
This answer is provided for general informational purposes only and does not constitute financial advice. Every family’s situation is different. For personalized guidance, schedule a free consultation with our team.
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