Can You Have a Roth IRA and a 401(k)?
Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.
You can have both a Roth IRA and a 401(k), but each account has its own annual contribution limit.
In 2025, you can contribute up to $7,000 to a Roth IRA, with an extra $1,000 if you’re 50 or older. That limit is unchanged from 2024.
When it comes to your 401(k) plan, you can contribute $23,500 in 2025. If you’re 50 or older, you get an extra catch-up contribution of at least $7,500. (Those age 60 to 63 get an increased catch-up contribution of $11,250.)
If you can max out both plans, congratulations: You’re well on your way to retirement success.
on Capitalize's website
How to choose between a Roth IRA and a 401(k)
If you can’t contribute the maximum to both types of accounts, don’t worry. Most of us fall into that group. The ideal amount to save for retirement will vary by your financial situation and your overall goals. Check out our retirement calculator to calculate how much you need and where you currently stand.
If you’re trying to figure out which type of account is the best place for your hard-earned dollars, start here:
If your employer offers a matching contribution in your 401(k) plan, consider contributing enough to get as much of that free money as you can.
Once you’re getting the full match, consider the pros and cons of a Roth IRA versus a 401(k). A lot will depend on the 401(k) you have. Some plans offer a good selection of low-cost investments; others, not so much. Some employers cover the plan’s administrative costs; others pass on those costs to employees. The beauty of an IRA (whether Roth or traditional) is that you can open one at just about any discount broker, with no account fees and access to a wide variety of low-cost investments.
» Ready to get started? See our picks for the best Roth IRA accounts
Consider, too, whether your employer offers a Roth version of the 401(k) — many now do. Then you'll want to decide whether the Roth or traditional tax treatment is best for you. Generally speaking, a Roth account is a good choice if you expect your tax rate to be higher in retirement — you'll pay taxes now instead of later at that higher rate. A traditional can be a better choice if you think your tax rate will be lower in retirement.
If you're not sure, you can split the difference by contributing to both types of accounts.
Still not sure which account is best for you?
Dive into our road map for how to choose between an IRA and a 401(k).
Check out our tips for how to choose between a Roth 401(k) and a Roth IRA.
