Contribution limits on Roth IRA and 401k - are they separate or combined?

7 Good news! The contribution limits for your 401(k) and Roth IRA are completely separate from each other. For 2025, you can contribute the full $24,500 to your 401(k) AND the full $7,500 to your Roth IRA. Think of them as two different buckets that don't affect each other. The 401(k) is an employer-sponsored retirement plan with its own set of rules, while the Roth IRA is an individual retirement account with separate regulations. Just a heads-up though - there are income limits for Roth IRA contributions. If your Modified Adjusted Gross Income (MAGI) exceeds certain thresholds, your ability to contribute to a Roth IRA might be reduced or eliminated completely. For 2025, the phase-out range for single filers starts around $146,000-$161,000, and for married filing jointly it's about $230,000-$240,000.

18 I was in the exact same boat last year trying to figure out retirement contribution limits! After getting conflicting advice from coworkers, I finally used https://taxr.ai to analyze my situation. Their system confirmed what the expert above said - 401k and Roth IRA limits are completely separate buckets. What I found super helpful is that they looked at my previous tax returns and projected what my MAGI would likely be, then gave personalized advice on whether I should do regular Roth contributions or consider a backdoor Roth based on my specific situation. They even flagged that my employer's 401k matching wasn't correctly showing up in one quarter which I totally would have missed!

5 Just wanted to follow up - I ended up trying taxr.ai after seeing it mentioned here. Totally worth it for my situation! The MAGI projection helped me realize I was definitely going to exceed the Roth IRA income limits, so I went ahead with the backdoor Roth approach they recommended. They also identified that I was over-contributing to my 401k because I had switched jobs mid-year and my new employer's system wasn't accounting for contributions at my previous job. Would have been a headache to fix that after the fact! Their breakdown of tax-efficient investment strategies was super helpful too.

20 For anyone hitting the Roth IRA income limits or having trouble maxing out their contributions, I discovered a fantastic service called Claimyr (https://claimyr.com) when I was trying to reach the IRS about some confusion with my retirement account limits. I'd been on hold with the IRS for HOURS across multiple days trying to get guidance on my specific situation. Claimyr got me connected to a real IRS agent in about 15 minutes who cleared up my questions about the backdoor Roth process and confirmed I was doing my calculations correctly. There's a video demo of how it works here: https://youtu.be/_kiP6q8DX5c if you're curious. Saved me so much frustration compared to the 3+ hour wait times I was experiencing before.

10 I have to eat my words here. After posting that skeptical comment yesterday, I decided to try Claimyr just to prove it wouldn't work. I had been trying for WEEKS to get someone at the IRS to explain how the pro-rata rule would affect my backdoor Roth strategy given my existing IRA balances. Within 20 minutes, I was talking to an actual IRS agent who walked me through exactly how to calculate the taxable portion of my conversion and confirmed I was interpreting Form 8606 correctly. I've literally never gotten through to the IRS before despite multiple attempts. Totally worth it for the time saved and stress avoided.

22 Don't forget about the mega backdoor Roth if your 401k plan allows after-tax contributions and in-plan Roth conversions! This lets you put WAY more into Roth accounts beyond the standard limits. My plan allows this and I've been able to contribute: - $24,500 to traditional 401k - $7,500 to Roth IRA (via backdoor) - An additional $41,000 via mega backdoor Roth! The $41k comes from the overall $69,500 limit for 2025 minus the $24,500 employee contribution and minus any employer match.

15 Does anyone know if the 401k limit includes employer matching? My company matches 5% of my salary, not sure if that counts toward the $24,500 limit.

This is such a helpful thread! I've been maxing out my 401k for years but never realized I could also do the full Roth IRA contribution on top of it. I always assumed there was some combined limit that would prevent me from doing both. Just to make sure I understand correctly - if I'm 28 years old and make $95,000 annually, I can contribute: - $24,500 to my 401k - $7,500 to my Roth IRA - And my employer's 4% match doesn't count against either of those limits Is that right? This could be a game-changer for my retirement savings strategy. I've been leaving money on the table by not opening a Roth IRA thinking I was already "maxed out" with just my 401k contributions.

Great question! I was confused about this same thing when I started getting serious about retirement savings. The limits are indeed completely separate - you can max out both accounts without any overlap. One thing I'd add to the excellent advice already given: consider the tax strategy between traditional vs Roth 401k contributions. At 32, you likely have decades until retirement, so Roth contributions (whether 401k or IRA) can be really powerful for tax-free growth. You might want to consider splitting your 401k contributions between traditional and Roth, especially if your employer offers both options. Also, don't forget about HSA contributions if you have access to a high-deductible health plan! For 2025, you can contribute $4,300 for individual coverage or $8,550 for family coverage. HSAs are triple tax-advantaged and can serve as another retirement account after age 65. The fact that you're thinking about maximizing contributions at 32 puts you way ahead of most people. Keep up the great work!