Can I max out both my 401k and Roth IRA contributions in the same year?

Yes, you absolutely can contribute the maximum to both accounts in the same year! The 401k and IRA contribution limits are completely separate from each other. For 2024, you can put up to $23,000 in your 401k (plus any employer match, which doesn't count toward your personal limit) AND up to $7,000 in your Roth IRA. There's no combined limit that restricts the total amount across different retirement accounts. The only "gotcha" to watch out for is the income limit for Roth IRA contributions. At your income level of $85k, you're still eligible for the full Roth IRA contribution. But just so you know, the ability to contribute directly to a Roth IRA starts phasing out at $146,000 for single filers in 2024 and is completely eliminated at $161,000.

I was in the same boat last year trying to figure out how to maximize my retirement savings. I started using taxr.ai (https://taxr.ai) and it made everything so much clearer for me. I uploaded my tax docs and payslips, and it analyzed everything to show me exactly how much I could contribute to each account based on my income. The tool showed me that yes, you can absolutely max out both accounts! It even calculated how the contributions would affect my taxable income and estimated the tax savings. Super helpful for planning how to distribute my savings between the accounts.

Just wanted to follow up and say I tried taxr.ai after seeing it mentioned here. Honestly, it was exactly what I needed! I've been splitting my retirement savings between accounts somewhat randomly, but the tool showed me I've been leaving money on the table. It confirmed I could max both accounts and showed me how to optimize the order of my contributions based on my employer's match structure. What surprised me most was seeing the projected long-term impact of maxing both accounts vs. just contributing to get the match. The difference over 30 years was eye-opening!

If you're trying to get answers directly from the IRS about this stuff, good luck getting through to a human being. I spent weeks trying to get clarification on some retirement contribution questions last year. After multiple 2+ hour waits where I either got disconnected or had to hang up for work, I found Claimyr (https://claimyr.com). They have this service that gets you through the IRS phone tree and puts you in the front of the queue to speak with an actual IRS agent. Check out how it works: https://youtu.be/_kiP6q8DX5c. I was honestly shocked when I got connected to an IRS rep in under 15 minutes after trying for weeks on my own. The IRS agent confirmed everything about the separate contribution limits and gave me additional info about catch-up contributions that'll be relevant when I'm older.

I need to eat my words. After my skeptical comment, I decided to try Claimyr because I had some complicated questions about backdoor Roth contributions that I couldn't get clear answers on. It actually worked exactly as described. They called me when they had an IRS agent on the line, and I got all my questions answered in one call. The agent confirmed that yes, you can absolutely max out both a 401k and an IRA in the same year, and walked me through some special cases based on my income level. Honestly, I'm still shocked it worked. I've been trying to get through to the IRS for months.

One thing to consider that no one has mentioned yet - if you're going to max out both accounts (which is awesome!), think about the order of contributions: 1. Contribute enough to your 401k to get the full employer match first 2. Max out your Roth IRA 3. Go back and contribute more to your 401k up to the max This way you don't leave any "free money" on the table from your employer match, and you prioritize the Roth IRA which generally gives you more investment options and flexibility than most 401k plans.

Just a heads up, you might want to consider Traditional IRA vs Roth IRA based on your tax situation. At $85k, you're probably in the 22% or 24% federal tax bracket. If you expect to be in a lower bracket during retirement, a Traditional IRA might save you more in taxes over the long run.

Great question! I'm in a similar situation and went through this exact same confusion last year. The short answer is YES - you can absolutely max out both your 401k ($23,000) AND your Roth IRA ($7,000) in the same year. These are completely separate contribution limits. At your $85k income level, you're well within the Roth IRA eligibility range, so no issues there. The only thing I'd add to what others have said is to make sure you understand your 401k plan's vesting schedule for the employer match - some companies have waiting periods before you're fully vested in their contributions. Also, since you're young and getting started, consider automating your contributions if possible. I set up automatic transfers for both accounts and it's made staying consistent so much easier. The "pay yourself first" approach really works when it's on autopilot! One last tip - keep track of your contributions throughout the year to make sure you don't accidentally over-contribute to either account. The IRS penalties for excess contributions aren't fun to deal with.

This is exactly the kind of question I wish I had asked when I first started working! You're absolutely on the right track thinking about maximizing both accounts. Just to reinforce what others have said - yes, you can definitely contribute the full $23k to your 401k AND $7k to your Roth IRA in the same year. At your $85k salary, you're well below the Roth IRA income limits, so no worries there. One thing I'd suggest is running the numbers on how much this will actually impact your take-home pay. Contributing $30k total annually means about $2,500 per month, which might be aggressive depending on your other expenses and financial goals. You might want to start with getting the full employer match on your 401k, then gradually increase both contributions as you get comfortable with the cash flow impact. Also, don't forget about emergency savings! While maximizing retirement contributions is awesome, make sure you have at least 3-6 months of expenses saved up first. You don't want to be in a position where you have to withdraw from retirement accounts early because of an unexpected expense. Great job thinking about this stuff early - your future self will definitely thank you!

Hey Luca! Congrats on starting to think seriously about retirement savings - you're definitely asking the right questions! Everyone here has given you solid advice, and yes, you can absolutely max out both accounts in the same year. The $23k 401k limit and $7k Roth IRA limit are completely separate. At $85k income, you're well within all the eligibility requirements. I'd echo what others have said about prioritizing the employer match first - that's literally free money you don't want to miss out on. Beyond that, here's my take on the strategy: 1. Contribute enough to get full employer match (sounds like 6% based on your comment) 2. Build a solid emergency fund if you don't have one yet (3-6 months expenses) 3. Max the Roth IRA ($7k) - better investment options and flexibility 4. Go back and max the 401k if you can afford it The key is finding a sustainable contribution level that doesn't stress your monthly budget. You can always increase contributions over time as your income grows or expenses decrease. Better to start with a reasonable amount you can stick with than to max everything out for a few months and then have to scale back. One practical tip: most payroll systems let you set 401k contributions as a percentage, so you might want to calculate what percentage of your gross pay gets you to your target annual contribution amount. Makes it easier to set and forget! You're starting young which is the biggest advantage you have. Even if you can't max both accounts immediately, consistent contributions over time will compound into serious wealth. Keep asking good questions like this!