Can I Have a 401(k) and an IRA?

Yes, you can have both a 401(k) and an IRA. But the tax advantages of a traditional IRA may be limited, depending on your income.
June Sham
Andrea Coombes
By Andrea Coombes and  June Sham 
Updated
Edited by Arielle O'Shea Reviewed by Michael Randall

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Wondering if you can contribute to both a 401(k) plan and an IRA in the same year? The simple answer is yes, and it’s very common for people to have both as a way to save for retirement and diversify their tax strategies.

However, keep in mind that each retirement account has annual contribution limits, and that your IRA contribution could be limited by both your income amount and whether you or your spouse already have a 401(k) plan.

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Rules for contributing to a 401(k) plan and a traditional IRA

Both the 401(k) plan and an IRA have annual contribution limits set by the IRS. In 2024, the 401(k) contribution limit for employees is $23,000, while those 50 and older can add an extra $7,500 as a catch-up contribution.

For the IRA, the 2024 contribution limit is $7,000, with an extra $1,000 for those 50 and older. With traditional IRAs, you could receive a tax deduction for your contributions every year. 401(k)s offer a very similar tax break: if you contribute to a traditional 401(k) plan, your 401(k) contributions reduce your taxable income.

One significant caveat: If you have a 401(k) or other retirement plan at work, or your spouse does, then your contribution to a traditional IRA may not be deductible at certain incomes. You'll want to look at the IRA income limits to see if you qualify to deduct your contribution to a traditional IRA. In some cases, you may be able to deduct a portion of your contribution. (Even if you’re ineligible to deduct your IRA contribution, you can still contribute to an IRA through nondeductible IRAs or potentially a Roth IRA, which has a higher income limit.)

» Here’s what to know about having a 401(k) plan and a Roth IRA.

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Income limits for contributing to both a traditional IRA and a 401(k)

The below table outlines the IRS limits for deducting your contribution to a traditional IRA if you or your spouse are covered by a retirement plan at work.

Filing status

2023 income range

2024 income range

Deduction limit

Single or head of household (and covered by retirement plan at work)

$73,000 or less.

$77,000 or less.

Full deduction.

More than $73,000, but less than $83,000.

More than $77,000, but less than $87,000.

Partial deduction.

$83,000 or more.

$87,000 or more.

No deduction.

Married filing jointly (and covered by retirement plan at work)

$116,000 or less.

$123,000 or less.

Full deduction.

More than $116,000, but less than $136,000.

More than $123,000, but less than $143,000.

Partial deduction.

$136,000 or more.

$143,000 or more.

No deduction.

Married filing jointly (spouse covered by retirement plan at work)

$218,000 or less.

$230,000 or less.

Full deduction.

More than $218,000, but less than $228,000.

More than $230,000, but less than $240,000.

Partial deduction.

$228,000 or more.

$240,000 or more.

No deduction.

Married filing separately (you or spouse covered by retirement plan at work)

Less than $10,000.

Less than $10,000.

Partial deduction.

$10,000 or more.

$10,000 or more.

No deduction.

» Ready to decide? Check out all of our picks for the best IRA accounts

How to choose between an IRA and a 401(k)

If you have a 401(k) at work, you may be trying to figure out if it makes sense to also open up an IRA. Here’s one way to approach deciding between a 401(k) and an IRA, assuming you can’t max out both:

  1. If your employer offers a 401(k) match, consider contributing enough to get all of that free money.

  2. Once you’re set up to get the full match in your 401(k), next consider contributing to an IRA. If you’re eligible for the tax deduction, a traditional IRA can offer a lot of benefits beyond that tax break, including access to low-cost investments and low or no administrative fees. A Roth IRA is another option.

  3. If you’re not eligible to claim the traditional IRA tax deduction or a Roth isn’t right for you, then sticking with your 401(k) might make the most sense.

» Still not sure? Read our road map for choosing between an IRA vs. 401(k)

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