Can I contribute to both a 401(k) and an IRA?

By Denise Appleby AAA
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.)

Question answered by Denise Appleby, CISP, CRC, CRPS, CRSP, APA



RELATED FAQS

  1. Will I pay taxes on my Social Security payouts?

    Find out if you're one of the people who has to pay federal income taxes on the Social Security benefit you receive.
  2. Can I deduct my Individual Retirement Account (IRA) contribution on my tax return?

    Whether you can deduct IRA contributions on your tax return depends on the type of IRA you have, your participation in an ...
  3. Can I contribute to a Roth IRA and still participate in my employer-sponsored retirement ...

    Find out the rules and limits on contributing to both a Roth IRA and employer-sponsored retirement plan.
  4. At what age will I be eligible for the maximum Social Security payout?

    The year you choose for collecting your social security will play a large part in determining how much money you'll receive ...
RELATED TERMS
  1. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
  2. Death Master File (DMF)

    Also known as Social Security Death Index. A list of people whose ...
  3. Leveraged Benefits

    The use – by a business owner or professional practitioner – ...
  4. Peri-Retirement

    A term for the period of time leading up to actual retirement. ...
  5. MyRA

    A new tax-advantaged retirement account that President Barack ...
  6. Target-Date Fund

    A mutual fund in the hybrid category that automatically resets ...
comments powered by Disqus
Related Articles
  1. 5 Ways To Stretch Your Retirement Budget
    Budgeting

    5 Ways To Stretch Your Retirement Budget

  2. It's Never Too Early To Start Saving
    Savings

    It's Never Too Early To Start Saving

  3. 5 Tax(ing) Retirement Mistakes
    Retirement

    5 Tax(ing) Retirement Mistakes

  4. Payroll Deductions Pay Off
    Retirement

    Payroll Deductions Pay Off

  5. 10 Steps To Tax Preparation
    Taxes

    10 Steps To Tax Preparation

Trading Center