📌 Key Takeaway: This guide covers top retirement accounts compared and a common priority order, along with what's in between. Our editorial team has researched the top options to give you clear, actionable guidance for your financial decisions.
Top Retirement Accounts Compared
| Account | 2025 Contribution Limit | Tax Treatment |
|---|---|---|
| 401(k) | $23,500 ($31,000 age 50+) | Pre-tax (traditional) or after-tax (Roth) |
| Traditional IRA | $7,000 ($8,000 age 50+) | Pre-tax, taxed on withdrawal |
| Roth IRA | $7,000 ($8,000 age 50+) | After-tax, tax-free withdrawals |
How These Accounts Compare
401(k) plans offer the highest contribution limits and often include employer matching — generally the best starting point if your employer offers a match, since that's effectively free money. Traditional IRAs offer similar tax-deferred growth with more investment flexibility than most 401(k) plans, though lower contribution limits. Roth IRAs trade upfront tax deduction for tax-free withdrawals in retirement — valuable if you expect to be in a similar or higher tax bracket later.
A Common Priority Order
- 1. Contribute enough to get any 401(k) employer match — this is an immediate, guaranteed return.
- 2. Max out an IRA (Roth or Traditional) — more investment flexibility than most employer plans.
- 3. Return to maxing out your 401(k) if you have funds remaining after the above.
🏖️ Retirement Guides
Browse all guides in this section