Contributing to an IRA and Roth IRA if You Already Have a 401K – 2021 and 2022 Non Deductible IRA and Maximum Tax Deductible Contributions

“Can I Contribute to an IRA, Roth IRA and a 401K if I have access to all these accounts? What are the limits and rules of doing so?” This is the kind of question I get fairly often and one that I actually had to recently sort out for myself. To determine if and how much you can contribute to multiple tax advantaged accounts you need to meet differing modified adjusted gross income (MAGI) limits and qualifications as discussed below. IRS tables and links to more detailed articles for all types of tax payers are also provided for your reference.

Contributing to a Traditional IRA

The maximum tax deductible IRA contribution (see annual limits) for the latest tax year is up to $6,000 (or $7,000 if you are 50 or older). However to determine your tax deductible contribution limit, you need to consider your spouse’s (if applicable) and your own income levels in light of the table below which look at your or your spouse’s work status and taxable income (MAGI).

Year
IRA Contribution Limit
IRA Contribution - Tax Deduction Qualification Income Phase-out Ranges
2021
$6,000 ($7,000 if > 50 years old)
(Single and have Employer Plan) - $66,000 to $76,000
(Married and have Employer Plan) - $105,000 to $125,000
(Married Filing Separately and have Employer Plan) - $0 to $10,000
(Married and Spouse has Employer Plan) - $198,000 to $208,000
2020
$6,000 ($7,000 if > 50 years old)
(Single and have Employer Plan) - $65,000 to $75,000
(Married and have Employer Plan) - $104,000 to $124,000
(Married Filing Separately and have Employer Plan) - $0 to $10,000
(Married and Spouse has Employer Plan) - $196,000 to $206,000
2019
$6,000 ($7,000 if > 50 years old)
(Single and have Employer Plan) - $64,000 to $74,000
(Married and have Employer Plan) - $103,000 to $123,000
(Married Filing Separately and have Employer Plan) - $0 to $10,000
(Married and Spouse has Employer Plan) - $193,000 to $203,000
2018
$5,500 ($6,500 if > 50 years old)
(Single and have Employer Plan) - $63,000 to $73,000
(Married and have Employer Plan) - $101,000 to $121,000
(Married Filing Separately and have Employer Plan) - $0 to $10,000
(Married and Spouse has Employer Plan) - $189,000 to $199,000
2017
$5,500 ($6,500 if > 50 years old)
(Single and have Employer Plan) - $62,000 to $72,000
(Married and have Employer Plan) - $99,000 to $119,000
(Married Filing Separately and have Employer Plan) - $0 to $10,000
(Married and Spouse has Employer Plan) - $186,000 to $196,000

Notes to the above table:

  • If you are not covered by a retirement plan at your job (like a 401K or 403b) and your spouse is not covered by a retirement plan either, there is no Modified Adjusted Gross Income (MAGI) limitation on your deductible contributions.

Why its a good idea to even make non-tax deductible contributions (always max out your IRA)

Even for those who make more than the above limits that allow them to take a tax deduction IRA contributions, it could still be a good idea to make after tax contributions. This is because you are eligible to make non-deductible contributions, up the annual limit, no matter your income and those contributions can benefit from the tax-free growth within the IRA account. Which can be a good (or great) benefit if you plan to hold the investments for a long time and expect to have a lower tax rate at retirement since your tax free gains in an IRA are taxed as ordinary income when withdrawn

Roth IRA

Similar to a traditional IRA, there are income limitations when it comes to contributing to a Roth IRA. For the current year the maximum Roth IRA contribution is $6,000 (or $7,000 if 50 and older) as shown in the table below:

YearRoth IRA Contribution LimitSingle Filer and HoH Income Phase Out RangeMarried, Joint Filer Income Phase Out RangeMarried, Filing Separate Income Phase Out Range
2021$6,000 ($7,000 if 50 or older)$125,000–$140,000$198,000–$208,000$0–$10,000
2020$6,000 ($7,000 if 50 or older)$124,000–$139,000$196,000–$206,000$0–$10,000
2019$6,000 ($7,000 if 50 or older)$122,000–$137,000$193,000–$203,000$0–$10,000
2018$5,500 ($6,500 if 50 or older)$120,000–$135,000$189,000–$199,000$0–$10,000
2017$5,500 ($6,500 if 50 or older)$118,000–$133,000$186,000–$196,000$0–$10,000

You cannot contribute to a Roth IRA at all (unlike a traditional IRA) if you taxable income is above the limits shown in the table above. See this article for detailed limits and conversion rules related to Roth IRAs. And remember, the maximum combined annual IRA limit applies to all contributions to a traditional or Roth IRA. E.g the $6,000 is across all types of IRAs. Employer 401K plans are different and subject to sperate limits.

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4 thoughts on “Contributing to an IRA and Roth IRA if You Already Have a 401K – 2021 and 2022 Non Deductible IRA and Maximum Tax Deductible Contributions”

  1. Not appreciating that the Government is ultimately in charge of our retirement accounts, DH only contributes to the 401K as much as the company will match, and then we invest into regular mutual funds. Sure, we pay more in taxes, but it’s ours whenever we want it.

    Reply
  2. Thanks for the info Andy, great reference. It’s ironic that an IRA plan can only be in the name of a single person, yet contribution to is tied to your martial status/income. I am a stay-at-home mom and this makes me completley reliant on my husdband’s retirment savings.

    Reply

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