If you contribute to your 401(k) account, you can still contribute to a Roth IRA and/or a traditional IRA, as long as you meet the IRA's eligibility requirements. However, if you wish to contribute to a traditional IRA and take a tax deduction for that contribution, depending on your income, your contribution to your employer's 401(k) plan may hinder your ability to do so. But It will not affect the amount you are able to contribute (up to $6,000—$7,000, with a catch-up contribution—for 2019).

Opening both an employer-sponsored 401(k) and your own IRA can help you to diversify your retirement nest egg and minimize the administrative fees you pay to maintain it. It makes sense to contribute as much to your 401(k) account as is required to receive the maximum matching contribution from your employer. Adding an IRA—of either the Roth or traditional type—broadens your selection of investment options and should allow you to pay lower fees than with your 401(k).

That said, there are rules around being able to have both types of accounts and on how much you can contribute to them—and whether your traditional IRA contribution will be tax deductible. What you're allowed to do depends on your income and your tax-filing status.

Key Takeaways

  • Investors who allocate parts of their wages to 401(k) accounts may still be able contribute money to Roth and/or traditional IRAs
  • Whether you can also have a Roth IRA or make a tax-deductible contribution to a traditional IRA—and how much you can put into one—depends on your modified adjusted gross income (MAGI) and tax-filing status
  • Single individuals must only calculate the contributions that pertain directly to them. But those who are married and filing jointly must factor in any funds their spouses contribute to their employer plans

IRA Eligibility and Contribution Limits

The contribution limits for both traditional and Roth IRAs went up for the 2019 tax year to $6,000 per year, plus a $1,000 catch-up contribution for those 50 and older. However, there are several situations in which your income and tax-filing status affect your ability to contribute to an IRA. These are different for Roth IRAs and traditional IRAs.

For a traditional IRA

Contributions to a traditional IRA are often tax-deductible. But if you are covered by a 401(k) or any other employer-sponsored plan, your modified adjusted gross income (MAGI) becomes a factor how much of your contribution to a traditional IRA account you can deduct—or whether none of it is deductible. If your MAGI exceeds the maximum amount by $10,000 or less, you'll be able to contribute a reduced amount to an IRA. If it exceeds that maximum "phase-out" amount, you won't be able to deduct any of your contribution.

This chart shows the levels of income (MAGI) at which those who have a 401(k) are allowed to contribute to an IRA, along with the maximum allowable contribution.

Deductibility of IRA Contributions If You Also Have an Employer Plan (2019)

Tax-filing status

Income to deduct full contribution

Income for partial  deduction

Income limit to allow any deduction

Contribution limit


Less than $64,000

$64,000 to $74,000

More than $74,000

$6,000 + $1,000 more if you're 50+

Married, with your own 401(k)

Less than $103,000

$103,000 to $123,000

More than $123,000

$6,000 each + $1,000 more if you're 50+

Married, spouse has a  401(k) 

Less than $193,000

$193,000 and $203,000

More than 

$6,000 each + $1,000 more if you're 50+ 

Married with own 401(k), filing own return


$0 to $10,000

More than $10,000

$6,000 + $1,000 more if you're 50+

As the chart shows, the income limit for a married couple filing jointly is lower if the spouse who files for the couple has their own 401(k). If the spouse of the person filing for the couple has a 401(k), the limit rises. If a spouse with their own 401(k) files separately, they cannot contribute at all if their income exceeds $10,000, and can contribute the full amount only if they have no income at all.

Publication 590-A from the IRS explains the deductibility of IRA contributions. It uses the somewhat complex formula you need to calculate how your 401(k) plan contributions affect your IRA contributions. If you are single, you must only calculate your own contributions. But if you are married and filing jointly, you must consider whether your spouse contributes to their employer plan and any deductible IRA contributions they make. Calculate your IRA contributions and your spouse’s contributions separately using the worksheet on the IRS website.

If you don't qualify for a deductible contribution, you can still benefit from the tax advantages of non-taxable investment growth by making a nondeductible contribution to your IRA account. If you do this, you will need to file IRS Form 8606 with your taxes for that year.

For a Roth IRA

Roth IRAs have a different type of income requirement. In order to contribute fully to a Roth, you need to earn no more than a specific limit, based on your tax-filing status. Because you contribute to a Roth IRA with after-tax dollars, the limits on pre-tax deductions that matter if you have both an employer plan and a traditional IRA do not apply here. It's essentially irrelevant whether you have an employer plan.

However, your income may limit how much of the maximum IRA contribution you can make to your Roth. See the table below for the details for 2019.

Roth IRA Contributions (2019)

Tax-filing status

Income for full contribution

Income for partial  contribution

No contribution allowed

Contribution limit


Less than $122,000

$122,000 to $137,000

More than $137,000

$6,000 + $1,000 more if you're 50+

Married, filing jointly

Less than $193,000

$193,000 to $203,000

More than $203,000

$6,000 each + $1,000 more if you're 50+

Married, filing separately


$0 to $10,000

More than $10,000

$6,000 + $1,000 more if you're 50+

Spousal IRAs

Having an income is a requirement for contributing to an IRA. A family where only one spouse works for pay can circumvent the rule by opening a spousal IRA. This allows the employed spouse to contribute to an IRA for a nonworking spouse and double the family's retirement savings. You can open a spousal IRA as either a traditional or a Roth account.

Handling Overcontributions to Your IRA

If you complete that IRS worksheet only to discover that you have contributed more to your IRAs than your allotment, you'll want to take out the amount you overcontributed, and fast. Failure to do so in a timely way could leave you liable for a 6% excise tax on the amount that exceeds the limit. The good news: that penalty is waived if the overpayment is addressed before you file your taxes for the year in which the contribution was made. Remember, for example, that the total contribution you are permitted to make to all your IRAs is $6,000/$7,000 (not, say, the $19,000 limit permitted for 401(k)s ($25,000 with the catch-up contribution). Don't get confused and don't contribute more than your eligible compensation— for example, wages, salaries, tips, commissions received as a percentage of sales, taxable alimony, and any separate maintenance payment you receive under a decree of divorce or separate maintenance.

Unfortunately, correcting the error isn't as simple as removing the excess contributions. You also need to calculate what the additional funds earned during the time they were in the IRA, and remove that sum as well from the account. That requires following a formula set out by the IRA to calculate these gains. Calculate carefully: Any error in your math can prompt the agency to impose the 6% penalty on the entire excess amount, as though the correction were never made.

The investment gain also must be added to your gross income for the year, and taxed accordingly. What's more, if you are under 59½, a 10% early withdrawal penalty will also be imposed.

The potential cost and hassle of correcting overcontributions to your IRA makes it wise to determine your eligibility to contribute to an IRA, and in what amount, before you take that step. And the complexity of calculating those figures means you may want to consult a plan administrator or tax professional for help.