Roth IRA vs. Roth 401(k): A Comprehensive Comparison for 2026
When planning for retirement, choosing the right savings vehicle is essential. Two popular options for tax-advantaged retirement savings are the Roth IRA and the Roth 401(k). Roth savings options are popular because they allow individuals to save after-tax dollars and allow for tax-free investment growth and tax-free withdrawals in retirement (subject to the requirements discussed below).
Despite these similarities, there are significant differences in eligibility, contribution limits, and other key features. Read on for a comparison, updated for 2026, to help you make an informed decision.
Eligibility, Availability and Contribution Limits
Roth IRA
Available to anyone with earned income, but subject to income limits.
Not offered by employers; individuals can open and contribute to a Roth IRA independently through financial institutions.
In 2026, the eligibility to contribute to a Roth IRA stops for single filers with a modified adjusted gross income (MAGI) of $168,000. For married couples filing jointly, eligibility stops at a MAGI of $252,000. If your income exceeds these thresholds, you cannot contribute to a Roth IRA.
Individuals can contribute up to $7,500 per year, with an additional $1,100 catch-up contribution allowed for those age 50 or older, for a total of $8,600.
Contributions cannot exceed your earned income for the year.
Roth 401(k)
Available to anyone who is eligible for an employer’s 401(k) plan IF the plan has a Roth feature.
Employees can contribute up to $24,500 in 2026, with an additional $8,000 catch-up contribution available for employees age 50 or older, for a total of $32,500.
Employees turning ages 60, 61, 62, and 63 in 2026 are eligible for an enhanced catch-up limit of $11,250, raising their total contribution limit to $35,750. Note that this enhanced catch-up does not apply to Roth IRAs, which continue to offer only the standard $1,100 catch-up for those age 50 and above.
Unlike a Roth IRA, a Roth 401(k) has no income limits for contributing, but contributions cannot exceed the employee’s earned income.
Tax Treatment
Roth IRA and Roth 401(k)
Contributions are made with after-tax dollars. Qualified withdrawals are tax-free if the account has been open for at least five years and the account holder is age 59½ or older at the time of the withdrawal.
Other Key Differences
Required Minimum Distributions (RMDs): Roth IRAs do not require RMDs during the account holder’s lifetime. Roth 401(k)s were subject to RMDs prior to January 1, 2024, beginning at age 70 ½, 72, or 73 depending on birth year, unless the balance was rolled over to a Roth IRA. Beginning January 1, 2024, Roth 401(k)s are exempt from RMDs, aligning their treatment with Roth IRAs and eliminating the need to roll funds to a Roth IRA solely to avoid required distributions.
Investment Choices: Roth IRAs typically offer a wider range of investment options, as they are not limited to the employer-sponsored plan’s investment menus.
Loan Provisions: Roth 401(k) accounts may allow loans, subject to plan rules; Roth IRAs do not allow loans.
Summary: Roth IRA vs. Roth 401(k) for 2026
| Feature | Roth IRA | Roth 401(k) |
|---|---|---|
| Eligibility | Income limits apply; Open to anyone with earned income | Available through employer; no income limits |
| Contribution Limit (Under 50) | $7,500 | $24,500 |
| Catch-Up Contribution (Age 50+) | $1,100 | $8,000 ($11,250 for those age 60-63) |
| Tax Treatment | After-tax contributions; tax-free withdrawals | After-tax contributions; tax-free withdrawals |
| Required Minimum Distributions (RMDs) | No RMDs | No RMDs beginning January 1, 2024 |
| Loan Options | Not permitted | May be permitted by plan |
Both the Roth IRA and Roth 401(k) offer valuable opportunities for tax-free growth and retirement withdrawals. The best choice depends on your employment situation, income level, and savings goals. If you are eligible, you may consider contributing to both to maximize your retirement savings. Be sure to consult with a financial advisor or tax professional to determine the optimal strategy for your circumstances in 2026.
Please read the Program Annual Disclosure Document (April 2025) carefully before investing. This Disclosure Document contains important information about the Program and investment options. Contact us at: abaretirement.com/contact.
Voya Financial Partners, Voya Financial Advisors and Voya Retirement Advisors are members of the Voya family of companies (“Voya”). Voya, the ABA Retirement Funds, Mercer Trust Company, Charles Schwab & Co., Inc., and state and local bar associations are separate, unaffiliated entities, and not responsible for one another’s products and services.