IRAs and 401Ks

[LBW]

If I contribute to a 401K through my employer, can I also contribute to an IRA? My accountant is telling me I can't b/c the 401K is a "pension plan." (Note that my employer doesn't match anything. Love that my own money is now being called a "pension.")

I feel like I should know the answer to this, but I've been a freelancer for most of the past 11 years and only became salaried employee about a year ago.

[squimp]

I have contributed to a retirement plan through my employer, a pension plan and also a Roth IRA in the past. All in the same year. I'm not a financial expert but I am not sure what your accountant is talking about.

[belovedgandp]

Unless you're hitting weird max contribution limits I'd assume you could. DH and I both contributed to employer sponsored 401k programs and Roth IRAs in the same year.

[NCGrandma]

I have contributed to a retirement plan through my employer, a pension plan and also a Roth IRA in the past. All in the same year. I'm not a financial expert but I am not sure what your accountant is talking about.

Me, too -- at one point I was contributing to the state retirement system, state 401k (no employer match) and 457b, plus a TIAA 403b offered through my university. (Can you say "trying to play catch up?") I also had a TIAA Roth IRA. My understanding was that as long as I kept an eye on the various rules about maximum contributions, it was ok. Everything was fully reported and never questioned. I agree that either your accountant may not be correct or the rules have changed very recently.

ETA: is it possible that the accountant was talking about a Traditional (deductible) IRA? In that case, the experience squimp and I reported, with Roth IRAs, would not necessarily apply.


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[robinsmommy]

Also depends on income, I think - if you make over X amount, then no, you cannot, is my understanding.

[legaleagle]

Correct - no traditional IRA & 401(k) in the same year. If you're still freelancing though you can contribute to the SEP-IRA limit.

[KrisM]

You can do a traditional IRA with a 401k. You may not be able to deduct any of it, based on income. Here is the IRS page answering those questions. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits

Many people contribute to a traditional IRA and then convert to a Roth IRA when they are over the income limits for the Roth, as there are no incomes limits for a traditional.

DH has a 401k at work. He contributes to a Roth without an issue. I contribute only to a deductible IRA.

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