Where Should I Start Saving? My 401(k) or an IRA or a Roth IRA?

You’re able to save more in your 401(k) ($23,500 in 2025 plus an additional $7,500 if you are 50-59 or over 64; $11,250 if you are 60-63) each year than you can in your IRA or Roth IRA ($7,000 plus an additional $1,000 if you are over 50). If your employer offers a match to your contributions, you should at least contribute as much to get that full match. Effective January 1, 2026, if you’re earning more than $145,000 that year, all catch-up contributions will have to go into the Roth portion of your 401(k). Overall, you’ll be happiest financially if you contribute as much as you can to your retirement accounts--the part you can deduct from your taxable income turns out to be free money, and those balances really compound over time!

Resources