If you're wondering, can you have a Roth IRA + 401k, you're not alone. Many people are looking for ways to boost their retirement savings by using both accounts. The good news? You can contribute to both simultaneously, giving you greater financial flexibility in the future.

By combining a 401(k) and a Roth IRA, you get the benefit of tax-deferred savings now while setting yourself up for tax-free withdrawals later. Understanding the rules, limits, and strategies can help you maximize these options.

If you want a plan that fits your specific situation, William Bevins, a certified financial planner, can help you create a retirement strategy that works. Call (615) 469-7348 or email billbevins@cypresscapital today to start planning for a stronger financial future.

How Does It Work: Can You Have a Roth IRA + 401k?

A 401(k) is a retirement plan that employers offer, allowing you to contribute pre-tax dollars. Some employers even match your contributions to a certain percentage, which can significantly increase your savings. However, since these contributions lower your taxable income today, you'll pay taxes on withdrawals in retirement.

A Roth IRA works differently. You contribute money that has already been taxed, meaning your savings grow tax-free, and withdrawals in retirement won’t be taxed either—as long as you meet the withdrawal requirements.

So, can you have a Roth IRA + 401k at the same time? Absolutely. Both accounts can help you create a more balanced and tax-efficient retirement strategy. But there are limits and rules to keep in mind.

Contribution Limits and Income Restrictions

If you plan to contribute to both a 401(k) and a Roth IRA, you’ll need to follow the annual contribution limits:

  • 401(k) Limits for 2025:
    Under age 50: $23,500
    Age 50 and older: $30,500 (includes catch-up contributions)
  • Roth IRA Limits for 2025:
    Under age 50: $7,000
    Age 50 and older: $8,000

However, Roth IRA contributions depend on your income. If you earn too much, your ability to contribute is reduced or eliminated. The 2025 income phase-out ranges for Roth IRA eligibility are:

  • Single filers: $146,000 - $161,000
  • Married filing jointly: $230,000 - $240,000

If your income is higher than these limits, you may still be able to contribute through a Backdoor Roth IRA strategy.

Why It’s Smart to Use Both a 401(k) and a Roth IRA

1. Tax Advantages in Both the Present and Future

A 401(k) lowers your taxable income today, while a Roth IRA allows for tax-free withdrawals later. Both accounts allow you to withdraw money strategically based on future tax rates.

2. Employer Matching Contributions

Many employers offer a match on 401(k) contributions, which is extra money for your retirement. Before contributing to a Roth IRA, take full advantage of any matching program your employer provides.

3. More Control Over Withdrawals in Retirement

A 401(k) requires withdrawals starting at age 73, known as Required Minimum Distributions (RMDs). A Roth IRA has no RMDs, so you can keep your savings invested for as long as you want.

How to Make the Most of Both Accounts

Step 1: Contribute Enough to Get Your Employer’s 401(k) Match

If your employer offers a match, start by contributing enough to get the full benefit. This is free money that helps your retirement savings grow faster.

Step 2: Max Out Your Roth IRA If Eligible

After securing your 401(k) match, consider contributing the maximum amount to a Roth IRA, assuming you qualify based on your income.

Step 3: Increase Your 401(k) Contributions

Once your Roth IRA is maxed out, you can add more to your 401(k) until you reach the annual limit.

Step 4: Consider a Backdoor Roth IRA If Needed

If your income is too high to contribute directly to a Roth IRA, a Backdoor Roth IRA may be an option. This involves contributing to a traditional IRA and then converting it to a Roth IRA.

FAQs

Can you max out a Roth IRA and a 401(k) in the same year?
Yes, as long as you meet the income requirements for a Roth IRA, you can contribute the full amount to both accounts.

What if my income is too high for a Roth IRA?
You might consider a Backdoor Roth IRA conversion if you earn more than the limit. This allows you to move funds from a traditional IRA into a Roth IRA, but you will owe taxes on the conversion. Consult your tax professional. 

Should I choose a Roth 401(k) instead of a traditional 401(k)?
Some employers offer a Roth 401(k) option for after-tax contributions and tax-free withdrawals. If your employer provides this option, it could be worth considering.

Can I roll over a 401(k) into a Roth IRA?
Yes, but doing so is a Roth conversion, meaning you’ll owe taxes on the amount rolled over.

Get Helpful Guidance from William Bevins

So, can you have a Roth IRA + 401k? The short answer is yes. It’s a great way to build financial security, but requires careful planning. You want to make sure you’re contributing wisely, balancing tax advantages, and making informed decisions about your future.

William Bevins is an experienced financial planner who helps individuals create retirement strategies that align with their goals. Helpful advice can make a difference whether you’re just getting started or looking to adjust your plan.

Call (615) 469-7348 today or email billbevins@cypresscapital to discuss your retirement savings strategy. Secure your future with a plan that works for you!