The IRA vs 401(k) argument starts in the wrong place. Match first. The IRS does not require a match. Your plan might. If it does, that deposit is part of compensation you only get by deferring.
$60,000 pay, you defer 6%, plan matches 100% of the first 4%:
- Your deferral: $3,600
- Employer match: $2,400
- If you only defer 3%: match falls to $1,800. You left $600 on the table.
Then the caps (employee money, 2026):
- 401(k) elective deferral: $24,500 (under 50)
- IRA, traditional + Roth combined: $7,500 (under 50; $8,600 at 50+)
Run the employer match calculator →
Room left: 401(k) deferral · IRA. Hub: United States calculators.
Employer match does not count against the employee elective-deferral limit. It does count toward the separate annual-additions limit. Vesting can still take the match back if you leave early. Estimate, not plan advice.
Direct answer: $2,400, then pick the next bucket
- Defer at least the match cap (here 4% of $60,000 = $2,400 of your own money)
- Collect $2,400 from the employer
- If you have an HDHP, the 2026 HSA self-only cap is still $4,400 (HSA)
- After that, extra 401(k) room is $24,500 − what you already deferred
- An IRA can still take $7,500 if you have compensation and the deduction/Roth rules let you
recognized pay = min(compensation, $360,000)
matched % = min(your deferral %, plan cap %)
employer match = recognized pay × matched % × match rate
The $360,000 figure is the 2026 IRC 401(a)(17) compensation limit (IRS COLA). Pay above that does not earn more match in this engine. $100,000 at the same 100% / 4% formula is $4,000.
Same $60,000, three deferral choices
| Your deferral | You put in | Match (100% of 4%) | 401(k) room left (under 50) |
|---|---|---|---|
| 3% | $1,800 | $1,800 | $22,700 |
| 4% | $2,400 | $2,400 | $22,100 |
| 6% | $3,600 | $2,400 | $20,900 |
Going from 4% to 6% does not raise the match. It only uses more of your $24,500.
When the IRA wins the next dollar
- Bad 401(k) menu, match already captured. An IRA lets you pick the fund. Cap is $7,500, not $24,500.
- You already hit $24,500 at work. The IRA is a second bucket, subject to income limits for deducting a traditional IRA or contributing to a Roth IRA. The live IRA tool only tracks the dollar cap, not MAGI phase-outs.
- No workplace plan. Then the IRA is the workplace. $7,500 (or $8,600).
Roth vs traditional on the same 401(k) dollar is a tax-rate bet, not a match question: Roth vs traditional.
A traditional 401(k) lowers FIT on the stub and does not lower FICA. See the paycheck calculator.
Not if the match is real and you will vest. $2,400 of employer money beats a $2,400 IRA deposit you could have made after the match.
No. They are separate codes. You can still have $7,500 of IRA room and $20,900 of 401(k) room on this $60,000 / 6% example (under 50).
IRA catch-up is already in the IRA tool ($8,600). 401(k) catch-up is a different calculator: catch-up.