401 (k) and IRA: Can you do both? YES!


401 (k) and IRA: Can you do both? YES!


The short answer is “yes.” Changing jobs is common today, and many people end up with more than one type of retirement account. The key is to leverage each account’s benefits and restrictions to maximize your retirement savings.

First, know the limits. The 2015 contribution limit for a 401(k) is $18,000, or $24,000 if you’re 50 and over. You may deposit $5,500 in combined Roth or traditional IRAs for 2015, or $6,500 if you’re 50 and over.

Maximize your balances within those limits. If you have an employer-sponsored 401(k) with matching contributions, you might prioritize deposits to that account to reach the total match.

Review your IRA options for tax advantages. Contributions to a 401(k) can limit tax deductions for traditional IRAs, but Roth IRAs are not affected. If you qualify for a Roth IRA and contribute to a 401(k), they make a good match.

To schedule a free personal consultation with a Horizon advisor, call 888-873-2640 or visit your nearest Horizon location.