A:

If you contribute to your 401(k) account, you may still contribute to a Roth IRA and/or a Traditional IRA; however, your participation in the 401(k) plan may affect your ability to take a tax deduction for any Traditional IRA contributions. It will not affect the amount you are able to contribute. (To learn more, see Are You an Active Participant? and Traditional IRA Deductibility Limits.)



Your 401(k) contribution has no effect on your Roth IRA contributions. You only need to ensure you meet the eligibility requirements for funding a Roth IRA. (For more on this, see Roth IRA: Back To Basics.)



If you are looking for more information about funding a 401K or IRA, Investopedia's Advisor Insights tackles the topic by answering one of our user questions.



RELATED FAQS
  1. Can an individual contribute to both a Roth IRA and a Traditional IRA in the same ...

    Yes, an individual can contribute to both a Roth IRA and a Traditional IRA in the same year. The total contribution into ... Read Answer >>
  2. How do I open a Roth IRA if my Husband and I make over $300k?

    Between my husband and I, we make around 350k to 400k a year.  ... Read Answer >>
  3. Can I still contribute to my Roth IRA if my spouse earns over the requirement cap?

    My spouse makes over the amount allowed to contribute to a Roth IRA. However, I do not. Is it possible... Read Answer >>
  4. My spouse has little/no income. Can I contribute to my spouse's IRA?

    Yes. You may make a Traditional IRA contribution to your spouse's Traditional IRA because you have eligible compensation.There ... Read Answer >>
  5. If I participate in my company's SIMPLE IRA plan, can I also contribute to another ...

    Because the SIMPLE IRA contribution limits are much lower than the 401(k) limits, it might at first seem unfair that you ... Read Answer >>
  6. Why are IRA, Roth IRAs and 401(k) contributions limited?

    Find out why contributions to IRA, Roth IRA and 401(k) retirement savings plans are limited by the IRS, including what the ... Read Answer >>
Related Articles
  1. Retirement

    Roth IRA Contribution Rules: The Basics

    What you need to know about Roth IRA contributions – from eligibility to dollar limits, deadlines to tax breaks.
  2. Retirement

    8 Reasons to Roll Over Your 401(k) to an IRA

    Switching jobs? Moving your retirement savings into an IRA has advantages that may allow you to build a larger nest egg.
  3. Retirement

    How Much It Takes to Max Out Your IRA

    IRAs have certain tax advantages that allow your nest egg to grow at a faster rate. But there are annual limits on how much you can contribute.
  4. Retirement

    Roth IRA Contribution Limits in 2016

    Discover the benefits of Roth IRA accounts and how much you can contribute for your retirement. Learn which IRA plan is best for you.
  5. Retirement

    Don't Make These Top 10 Mistakes On Your Roth IRA

    Don't lose out on the benefits of a Roth by contributing too much, breaking rollover rules or making other avoidable errors.
  6. Financial Advisors

    Why Some Advisors are Shy to Convert Roth IRAs

    Potential upcoming changes from the Obama Administration could hit rollovers from traditional to Roth IRAs, and that has advisors reluctant to convert.
  7. Taxes

    How To Use Your IRA As A Last-Minute Tax Deduction

    While some people are stressing over their taxes, there is a big advantage to delaying the process: You can maximize your 2014 contributions to your IRA.
  8. Retirement

    Maxing Out Your 401(k) vs. an IRA or Roth IRA

    What is the best way to save for retirement? Max out your 401(k)? Add an IRA? And what about the Roth? Your questions, answered.
  9. Taxes

    These IRA Contributions Will Cut Your 2015 Taxes

    No matter how you save for retirement, take advantage of the time between now and April 15, 2016, to add to your nest egg while cutting your tax bill.
  10. Retirement

    401(k) vs. IRA: Which to Fund When

    Here are some points to remember as you're choosing where to put your retirement savings.
RELATED TERMS
  1. Roth IRA

    An individual retirement plan that bears many similarities to ...
  2. Individual Retirement Account - IRA

    An investing tool used by individuals to earn and earmark funds ...
  3. IRS Publication 590: Individual Retirement Arrangements (IRAs)

    A document published by the Internal Revenue Service (IRS) that ...
  4. Recharacterization

    The treatment of a contribution as being made to another type ...
  5. Traditional IRA

    An individual retirement account (IRA) that allows individuals ...
  6. Backdoor Roth IRA

    A method that taxpayers can use to place retirement savings in ...
Trading Center