Can I contribute to a Roth IRA and still participate in my employer-sponsored retirement plan?

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November 2016
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ABSOLUTELY! Good for you for trying to maximize what you can invest.

Say, for example, your employer sponsored plan is a 401(k). The contribution limits for 2016 are $18,000 if you're under 50 (not including the company match if there is one) and $24,000 if you are 50+. It is recommended to invest at least up to the company match, if there is one, if you have the means to do so. There are very few opportunities for free money and a company match is one of them.

From there, one can contribute up to $5,500/year (or $6,500 if 50+) total combined into IRAs (traditional and/or ROTH). There are some income limits on ROTHs. See here for more details. https://www.irs.gov/retirement-plans/plan-participant-employee/amount-of-roth-ira-contributions-that-you-can-make-for-2016.  

In a perfect world, one would participate in the company match, fully fund their IRA, and contribute the max allowable by the IRS into the employer plan. Then whatever is left for investing goes into a brokerage account. If you are able prioritize saving like that (especially if you start young), it could make a big impact down the road.

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