How much can I contribute to a 401(k) and IRA?

In 2026, the standard contribution limit for a 401(k) is $24,500, while the limit for IRA contributions is $7,500. That means you can contribute up to $31,000 between a 401(k) and IRA, though if you earn less than that amount, you're limited to your earned income for the year. If you're 50 or older, you can make additional catch-up contributions to both a 401(k) and IRA.

Can you max out a 401(k) and IRA in the same year?

Yes, you can max out both a 401(k) and IRA in the same year, assuming you earned enough income to make the maximum contribution for each account.

Can I contribute to an IRA if I have a 401(k) at work?

Yes, you can contribute to an IRA if you have a 401(k) at work. However, you'll need to make sure your contributions don't exceed your earnings for the year. Also, if you or your spouse have access to a workplace retirement account, you may not be eligible to deduct your contributions to a traditional IRA.

Is $600,000 a good retirement balance?

Whether $600,000 (or any specific amount) is a good retirement balance depends on a host of factors, including your cost of living in retirement, Social Security benefits, your planned withdrawal rate, and whether your savings is in traditional or Roth accounts. Using the 4% rule, you could safely withdraw $24,000 from a $600,000 nest egg during your first year of retirement.

Can I Contribute to an IRA and a 401(k)?

You can contribute to both an IRA and a 401(k), but there are limitations you need to know.

Key Points

You can contribute to both a 401(k) and IRA in the same year.
Roth IRAs offer tax-free withdrawals, but income limits apply.
Both 401(k)s and IRAs have annual contribution limits, influenced by age and income levels.

A work 401(k) is a nice perk that can help you increase your retirement savings. However, if you're also trying to save outside of your employer-sponsored retirement plan, you might run into some problems.

The good news is that you can contribute to an individual retirement account (IRA) even if you also contribute to a 401(k) at work. There are certain limitations you should consider, though.

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An infographic outlining the pros of contributing to both an employer-sponsored 401(k) and an IRA. — Image source: The Motley Fool.

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With a traditional IRA, there are specific income limitations for people who are eligible to participate in an employer's retirement plan.

For 2025, the income limits are:

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Data source: IRS.

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For 2026, the income limits are:

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Data source: IRS.

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Data source: IRS.

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For 2026, the income limits for contributing to a Roth IRA increase to:

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Data source: IRS.

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Other than the limits for married taxpayers filing separately, the Roth IRA income limits are significantly more generous than the deductible traditional IRA limits for employer-sponsored retirement plan participants.

It's also important to point out that these are the income limits to contribute directly to a Roth IRA. There is no income limit to convert a traditional IRA to a Roth IRA.

Roth IRA contributions are never tax-deductible. You're able to withdraw contributions tax- and penalty-free at any time. Earnings can be withdrawn tax-free after age 59 1/2. That makes a Roth IRA more flexible than a traditional IRA. You'll pay tax on all withdrawals from a traditional IRA, and early withdrawals carry a 10% penalty.

The decision between a Roth IRA and a traditional IRA often comes down to whether you want to pay taxes on those funds now (Roth) or later (traditional). If you expect your taxes to be higher in retirement, use a Roth.

For higher-income earners who don't qualify for a traditional IRA deduction, a Roth IRA is a no-brainer. Roth IRAs also have no required minimum distribution and no maximum contribution age, so if you're saving later in life, a Roth makes a lot of sense.

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Contributing to a 401(k) and IRA FAQs

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About the Author

Robin Hartill, CFP, is a contributing writer at The Motley Fool. Robin’s work has also been published by Yahoo Finance, USA Today, and Penny Hoarder. She is a graduate of the University of Florida.

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