Can I Max My Roth IRA and My 401k?

Sandy wants to know if she can max her Roth IRA and her 401k contributions.  Let’s dig into the rules.

Listen Now: Can I Max My Roth IRA and My 401k

can i max my roth ira and my 401k

Subscribe Where You Find Your Podcasts

Blog Post Alt Tag

Do you want to hear the full show?

The full episode is over 25 minutes long.  And we’ve found that not everyone wants to spend that much time listening to things.  But if you want to listen to the entire episode, it is below.

We answer:

Transcript: Can I Max My Roth IRA and My 401k?

This question is from Sandy. She asks, “Can you contribute the maximum amount to a Roth IRA and the Roth account in the government’s Thrift Savings Plan?”

The answer is yes—if you qualify to make a Roth IRA contribution.

Here are the contribution limits for 2020. For retirement plans whether it’s the Thrift Savings Plan, a 403b plan at the hospital or a school, or a 401k plan, you can contribute $19,500. If you’re over 50, there’s a catch-up contribution. That amount is $6,500. You can contribute $6,000 to a Roth IRA. If you’re 50 or older, you can contribute an additional $1,000.

If you wanted to maximize both, and you’re under age 50, that’s $25,500. If you’re 50 or older, that’s $33,000 total per person. If you’re married, you can do both, and your spouse can do both. If you have that much extra income, that’s phenomenal!

There are income limits for Roth IRA contributions. You can make the maximium Roth IRA contribution if your modified adjusted gross income (MAGI) is below these limits. For married couples filing a joint return, the limit is $196,000. If you’re single, that limit is $124,000. If you’re married and you file separate returns, the income limit is $10,000.

If your MAGI is over those limits, your eligibility to make those Roth IRA contributions changes. You may be able to do a partial contribution or none at all.

The Married Filing Separately Tax Trap

The married filing separately thing is an interesting little trap. A lot of people will file separate returns to try to save on state income taxes. But it has a hidden impact on things like your IRA contributions. It impacts deductions for traditional IRAs, Roth IRA contributions and Roth conversions.

If you’re married filing a separate return and your income is over $10,000, a lot of those things disappear. You want to be very careful with that. You don’t want to get a surprise later on.

Can I max my roth IRA and my 401k
Can I max my Roth IRA and my IRA
max roth ira and 401k


Don’t Miss An Episode

Get every episode of Monday Morning Money in your inbox.  Join our mailing list.

Subscribe Where You Find Your Podcasts

Check out our other posts.

How Retirement Income is Taxed

How Retirement Income is Taxed Today we look at how the most common types of retirement income are taxed.  We look at: The common types of accounts retirees use The
Read More

4 Reasons to NOT Start Social Security at 62

For many people, retiring as soon as they can is a major goal. One of the first ages they consider is 62. Today we share 4 reasons to NOT start Social Security at age 62.
Read More

Save More or Pay Off Your Mortgage?

Save More or Pay Off Your Mortgage? As you get closer to retirement, should you save more or pay off your mortgage?  This was a question we received from a
Read More

What is Tax-Loss Harvesting?

What Is Tax-Loss Harvesting? A listener asks a question about year end tax planning.  Can tax-loss harvesting help your tax situation?  Today we look at this strategy and how it
Read More

Is Bitcoin a Good Investment?

Is Bitcoin a Good Investment? Is Bitcoin a good investment? It is the new frontier in the investment world.  Its gains over the past six years will catch your eye. 
Read More

How to Pick Investments for Your 401k

How to Pick Investments for Your 401k Today we discuss how to pick investments for your 401k.  Do the performance statistics matter?  What about expenses? What are the most important
Read More
Financial Planning

About the Author

Neal Watson is a Certified Financial Planner™ Professional and a Financial Advisor with Fleming Watson Financial Advisors.    He specializes in helping hard working, middle class families plan for retirement.

Our Most Recent Videos And Posts