Can I Have Both a Roth and a Traditional IRA?

Yes, if You Meet the Eligibility Requirements for Each Type

Roth IRAs and traditional IRAs are common choices for retirement savings accounts. You can contribute to both types as long as your total contribution doesn’t exceed the Internal Revenue Service (IRS) annual limit.

While saving in an IRA, you can also participate in employer-sponsored plans, such as the 401(k), Simple IRA, and SEP, if you meet specific eligibility requirements.

Key Takeaways

  • You may be able to contribute to both a Roth IRA and a traditional IRA up to the annual limits set by the Internal Revenue Service (IRS).
  • If aged 50 or older, you can contribute more as "catch-up" contributions.
  • Both types of IRAs have eligibility requirements.
  • You can also maximize employer-sponsored retirement plans that offer matching funds while saving in an IRA.
  • Traditional IRAs have RMDs or required minimum distribution rules, but Roth IRAs do not.

Dividing Your Contributions

Contributions to a traditional IRA are tax-deductible, which means that they lower your taxable income in the contribution year. However, your distributions will be taxed when you withdraw the money in retirement. You don’t get a tax deduction when you contribute to a Roth IRA since contributions are taxed upfront, but your withdrawals during retirement are tax-free.

Holding both types of IRAs provides a choice of taxable or tax-free contributions and income when you retire. As long as your total deposits in all accounts do not exceed the total contribution limit for that tax year, you can save to both types of IRAs.

In 2023 the IRS contribution limit is $6,500 when saving to either or both traditional and Roth IRAs. If you’re 50 or older, a catch-up provision allows an additional $1,000 in savings. Beginning in 2024, the annual catch-up contribution will be subject to a cost-of-living-adjustment (COLA) so that it will increase with inflation from the current $1,000 limit.

Traditional IRA or Roth IRA: How to Decide

Whether to invest in a traditional IRA or Roth IRA depends on how much you can contribute to each, your long-term retirement goals, and your preferred tax treatment. Compare the differences highlighted in the chart below.

Traditional IRA
  • Contributions can be tax deductible.

  • All withdrawals, including contributions and earnings, are taxed as ordinary income.

  • Account holders are subject to the IRS required minimum distribution rule.

  • Account holders are subject to a 10% withdrawal penalty if under age 59 1/2.

Roth IRA
  • Contributions are not tax deductible.

  • Withdrawals of earnings are not subject to taxation if it has been at least five years from the first contribution.

  • Account holders are not subject to the IRS required minimum distribution rule.

  • Distributions are not taxed as ordinary income in retirement.

  • Account holders are subject to a 10% withdrawal penalty if under age 59 1/2.

Traditional and Roth IRA Eligibility

For a traditional IRA, there is no income limit on eligibility. However, the extent to which your contributions are tax deductible depends on your income and whether you or your spouse, if married, contribute to an employer-sponsored plan, such as a 401(k).

In 2023, single filers must have a modified adjusted gross income (MAGI) of less than $153,000, with contributions phased out starting at a MAGI of $138,000. The MAGI range for married couples filing jointly is $218,000 to $228,000.

Roth IRA contributions also have income limits. For 2023, if you’re married and filing jointly and your MAGI is $228,000 or more, you are ineligible to contribute to a Roth IRA. Single taxpayers with a MAGI of $153,000 or more are ineligible.

You must have earned income to contribute to either a Roth or a traditional IRA.

Traditional IRA and Roth IRA Withdrawal Requirements

After age 59 1/2, the account holder is no longer subject to the IRS premature withdrawal penalty of 10% and can choose when and how much, if any, to withdraw annually.

Traditional IRA account holders are required to take a required minimum distribution (RMD) at age 73 for individuals born between 1951 and 1959 and age 75 for those born in 1960 or later under the provisions of the SECURE 2.0 Act of 2022. These required distributions are fully taxable as ordinary income.

Account holders must take their first RMD by April 1 of the following tax year. All subsequent distributions must be taken by Dec. 31 of the distribution year. If the account holder opts to take the first distribution in the following tax year, they will receive two distributions in that year.

The minimum distribution requirement applies to all traditional IRAs owned. A single distribution can be made from one IRA to satisfy all and must total at least the sum of all required distributions.

Roth IRAs have no required minimum distribution requirements during the account holder's lifetime. However, upon death, non-spousal beneficiaries are required to take RMDs. The SECURE Act of 2019 requires these beneficiaries to withdraw all funds in the Roth IRA within ten years of the account holder's death.

Contributing to an IRA and a 401(k)

You can contribute to an IRA and a 401(k) if you meet eligibility requirements. The IRS also imposes income limits that determine whether your traditional IRA contributions are tax-deductible if you contribute to both. The amount you can contribute to a Roth IRA and a 401(k) is reduced or eliminated at higher incomes.

Before adding a traditional or Roth IRA to your saving plan, take full advantage of your 401(k) plan or another work-based retirement plan, especially if there is an employer-matching option. Also, company retirement plans generally have higher contribution limits than a traditional or Roth IRA. The contribution limit for 401(k) plans is $22,500 for 2023. Participants ages 50 and older can contribute an additional $7,500.

After Dec. 31, 2024, the SECURE 2.0 Act of 2022 substantially increases catch-up limits for 401(k) plan participants aged 60 to 63 to the greater of $10,000 or 150% of the “standard” catch-up amount for that year.

You have until the filing deadline of the following year to contribute to an IRA. So if you file your 2022 taxes, you have until April 18, 2023, in most states, to contribute for the 2022 tax year.

Can You Contribute to a Roth IRA and a Traditional IRA in the Same Year?

The IRS allows participants to contribute to Roth IRAs and Traditional IRAs in the same year. However, note that each type of retirement account has its own contribution rules and limits.

Can I Contribute to a Traditional IRA If I Have a Roth 401(k)?

You can contribute to a traditional IRA if you have a Roth 401(k) as long as certain requirements are met. Also, income limits determine whether IRA contributions are tax-deductible.

How Many IRAs Can You Have?

There are no restrictions on how many IRAs a person can own. However, IRS restricts how much can be contributed to an IRA annually. The maximum annual contribution is not per account but is the total that can be contributed across all accounts.

The Bottom Line

If you meet eligibility requirements, such as earned income, you can contribute to both a Roth and a traditional IRA. How much you save is up to you, as long as you don’t exceed the combined annual contribution limit set by the IRS. Roth IRA contributions are not tax-deductible but can be withdrawn tax-free from the account. Alternatively, traditional IRA contributions can be tax-deductible but cannot be withdrawn tax-free. Also, traditional IRAs have a required minimum distribution (RMD) provision, and Roth IRAs do not.

Article Sources
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  2. Internal Revenue Service. "Retirement Topics — Required Minimum Distributions (RMDs)."

  3. Internal Revenue Service. "Publication 590-B (2021), Distributions From Individual Retirement Arrangements (IRAs)."

  4. Internal Revenue Service. “401(k) Limit Increases to $22,500 for 2023, IRA Limit Rises to $6,500."

  5. U.S. Senate, Committee on Finance. "SECURE 2.0 Act of 2022 Summary," Page 2.

  6. Internal Revenue Service. "Publication 590-A (2021), Contributions to Individual Retirement Arrangements (IRAs)."

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  9. Internal Revenue Service. “Traditional and Roth IRAs.”

  10. Internal Revenue Services. "Retirement Plans FAQs on Designated Roth Accounts."

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