Can I Max Out My 401(k) and Still Contribute to an IRA?
If you’re already contributing the maximum to your 401(k), you might be wondering: Can I still contribute to an IRA?
The short answer is: yes, potentially — but the details matter.
In this article, we’ll walk through:
Whether you can contribute to an IRA while maxing out a 401(k)
When a traditional IRA contribution is deductible
What to do if your income is too high for a deduction
Roth IRA and backdoor Roth options
Understanding these rules can help you get more tax efficiency and flexibility out of your retirement savings.
Prefer to listen on the go? Click here to listen to this week’s episode on the Rules Regarding making both 401k and IRA contributions in the same tax year!
First Things First: Yes, You Can Contribute to Both
Contributing the maximum to your 401(k) does not prevent you from contributing to an IRA.
The IRS allows individuals to contribute to:
An employer-sponsored retirement plan (like a 401(k)), and
An Individual Retirement Account (IRA) in the same year
However, whether you receive a tax deduction for a traditional IRA contribution depends on your income and workplace retirement coverage.
Why Consider an IRA at All?
Even if you’re maxing out your 401(k), an IRA can provide additional benefits:
1. Tax-Deferred Growth
Investments inside an IRA grow tax deferred. Dividends, interest, and capital gains are not taxed each year — unlike investments held in a taxable brokerage account.
Taxes are deferred until withdrawals begin, either when you choose or when required minimum distributions (RMDs) start.
Current RMD age: 73
RMD age increases to 75 starting in 2033 for those born in 1960 or later
That can mean years — or decades — of uninterrupted compounding.
2. Potential Tax Deduction
In some cases, contributions to a traditional IRA are fully or partially deductible, lowering your taxable income today.
IRA Contribution Limits
For 2026:
Under age 50: $7,500
Age 50 and over: $8,600
These limits apply across all IRA contributions combined (traditional and Roth).
When Is a Traditional IRA Contribution Deductible?
The ability to deduct a traditional IRA contribution depends on two factors:
Are you covered by a workplace retirement plan?
What is your adjusted gross income (AGI)?
Are You Covered by a Workplace Plan?
You are considered covered if you:
Contribute to a 401(k), 403(b), 457, SEP, or SIMPLE IRA
Receive employer contributions (profit sharing or pension)
Not sure? Check Box 13 on your W-2 — if it’s checked, you’re covered.
2026 Deduction Limits (Traditional IRA)
Married Filing Jointly (covered by a plan):
Full deduction if AGI is below $129,000
Partial deduction between $129,000–$149,000
No deduction above $149,000
Single Filers:
Full deduction below $81,000
Partial deduction between $81,000–$91,000
No deduction above $91,000
If neither you nor your spouse is covered by a workplace plan, the contribution is fully deductible regardless of income.
Option 1: Non-Deductible Traditional IRA Contributions
If your income is too high for a deduction, you can still contribute to a traditional IRA on a non-deductible basis.
Benefits:
Tax-deferred growth on dividends, interest, and capital gains
Tradeoffs:
Requires careful recordkeeping
Withdrawals are taxed proportionally between contributions and gains
This adds complexity and often leads investors to consider other options.
Option 2: Roth IRA Contributions
A Roth IRA allows your money to grow tax free, and qualified withdrawals are also tax free.
2025 Roth IRA Income Limits
Married Filing Jointly:
Full contribution below $236,000 AGI
Phased out between $236,000–$242,000
Single Filers:
Full contribution below $150,000 AGI
Phased out between $150,000–$165,000
(Income limits increase slightly for 2026.)
If you’re eligible, a Roth IRA is often the cleanest and most flexible option.
Option 3: The Backdoor Roth IRA
If your income is too high for both a deductible IRA and a direct Roth IRA contribution, a backdoor Roth IRA may be an option.
How It Works (High-Level):
Contribute to a traditional IRA as a non-deductible contribution
Convert that contribution to a Roth IRA
If you do not have any other pre-tax IRA balances (traditional, SEP, or SIMPLE IRAs), the conversion is generally tax-free.
Important: Existing pre-tax IRA balances can trigger the pro-rata rule, making this strategy less effective.
Backdoor Roths can be powerful but must be executed carefully.
You Can Still Fund a Prior-Year IRA
Even if the calendar year has ended, you typically have until April 15 to make an IRA contribution for the prior year.
Just be sure the contribution is:
Properly designated for the correct tax year, and
Reported accurately on your tax return
Final Thoughts
Maxing out your 401(k) is a great start — but it doesn’t have to be the end of your retirement savings strategy.
Depending on your income and goals, an IRA can:
Add tax diversification
Increase flexibility in retirement
Improve long-term after-tax returns
The key is choosing the right type of IRA contribution for your situation.
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Have a great week—and I’ll talk to you next Friday.
Written by Ryan Morrissey CFP®, CLU®, CHFC®, CMFC
Founder & Principal Advisor of Morrissey Wealth Management
Host of the Retire with Ryan Podcast