You probably know that having a retirement account is a good idea. Is having two even better? Short answer: It depends. But not all account combos are above board, and some money moves that sound great together can actually be off limits.
Here are answers to FAQs about which accounts you could contribute to at the same time—and when you have to choose.
1. Can I contribute to a traditional and Roth 401(k) at the same time?
Yes, if your employer offers Roth 401(k)s. (Of retirement plans that Fidelity administers, over 94% do.1) Just know that your contributions are limited across plans. In 2025, someone under 50 can contribute a maximum of $23,500 in aggregate, not independently. Similarly, those who are age 50 to 59, or 64 and older, can split their catch-up contributions (up to $7,500 in 2025) between traditional and Roth 401(k)s. Under the SECURE 2.0 Act, those between ages 60 and 63 will now be eligible to split "super catch-up" contributions (up to $11,250 in 2025) between these plans, if their plan sponsor implements this feature. Note: Beginning in 2026, high earners will not have the option to split catch-up contributions; any catch up contributions will have to be made to the Roth 401(k).
Why might you want to split contributions between the two? Maybe you like how traditional 401(k) contributions lower taxable income now and how Roth 401(k) withdrawals are tax-free later.
"Strategically contributing to both accounts could be beneficial for those who want to manage their tax brackets," says Andrew Bachman, CFA®,2 CFP®,3 a director of Financial Solutions at Fidelity. If you don't know whether you'll be in a higher or lower tax bracket in the future, this could be a way to hedge your bets. Read about the Roth 401(k), which is most popular among 20- to 34-year-old Fidelity accountholders.
2. Can I contribute to a 401(k) and an individual retirement account (IRA) in the same year?
Yes, and according to Fidelity data, about 32% of its individual retirement accountholders also have an employer-sponsored defined contribution account, such as a 401(k).4 For tax year 2025, you can contribute up to $23,500 (plus an extra $7,500 for those age 50+, or $11,250 for those ages 60 to 63) to a 401(k), and up to $7,000 (plus an extra $1,000 for those age 50+) across all of your IRAs. These limits are independent between you and your spouse, meaning you both can contribute up to the maximum amount into your own accounts. Your income and whether you, your spouse, or your employers contribute to a workplace retirement plan determine whether and by how much your traditional IRA contributions are tax-deductible. (Roth IRA contributions aren't.) Income restrictions also apply to Roth IRA contributions.
Learn more about different types of retirement accounts.
3. Can I have 401(k)s from two different employers in the same year?
Yes. Maybe you switched full-time employers, or perhaps your side hustle offers a retirement plan, and maybe you prefer one plan's fund options but the other's employer match. Whatever reason you're contributing to two plans, just don't contribute more than the annual contribution limit across both plans.
In general, employers will stop paycheck contributions once you hit the maximum, but if you have multiple employers, they won't know your contributions outside of their own plan. If you exceed the limit, tell your employer. If you don't get back the excess before Tax Day the following year, you'll be subject to additional tax plus a 10% early withdrawal penalty. You have to record the excess contributions as income in the year they are made (and pay tax). The contributions can remain in the plan, and any contributions to a traditional 401(k )will again be subject to tax at withdrawal. If any early withdrawals are taken, subject to plan rules, you may be subject to an additional 10% penalty.
You can also have a workplace 401(k) and, if you're eligible, a self-employed 401(k) at the same time. Employee contribution limits apply across both plans, but unrelated employers can contribute up to 25% of your compensation independently. Total employee plus employer contributions cannot exceed $70,000 for 2025 ($77,500 if you're age 50 to 59, or 64 and older, and $81,250 if you're between ages 60 and 63 and contributing the catch-up contribution amount). This limit is independent for plans offered by unrelated employers.
4. Can I have a traditional IRA and a Roth IRA at the same time?
Yes. In fact, having both is central to a backdoor Roth, a strategy of converting nondeductible contributions in a traditional IRA to a Roth IRA. Contribution limits still apply across both accounts. If you convert traditional IRA funds to a Roth IRA, you must pay taxes on the converted amount. And to do so, you must proportionally split the converted amount between your after-tax and pre-tax balances across all your IRAs (except inherited IRAs), including contributions and earnings. For example, if 90% of your total traditional IRA assets are pre-tax and 10% are after-tax, you would need to pay taxes on 90% of the converted amount. Learn more about this pro rata rule.
5. Can I contribute to a health savings account (HSA) and health care flexible spending account (FSA) in the same year?
No. An exception: if you have an HSA and what's called a limited purpose flexible spending account (LPFSA). An LPFSA is an employer-sponsored pre-tax benefit that you can use to pay for qualified dental and vision expenses for employees enrolled in an HSA-eligible health plan. If you're married and your spouse is enrolled in an employer-sponsored health care FSA, then you're considered covered under that plan. As a result, you can't contribute to your HSA. Learn the difference between HSAs and FSAs.
6. Can I have two health insurance plans at the same time?
Yes. A process called coordination of benefits determines which insurance plan will pay first. Your primary plan will pay for the health claim first, paying the costs up to the plan's coverage limits, and then your second plan will kick in. Having two plans doesn't mean that you won't have any out-of-pocket costs. It just means that you may end up paying lower out-of-pocket costs, but keep in mind you may also be paying two premiums and two deductibles plus dealing with twice the paperwork.
Why would someone have more than one plan? Common examples include someone under 26 with their own plan through an employer and who remains on a parent's plan, or someone who's enrolled in an employer-sponsored plan and Medicare.
7. Can I collect severance pay and unemployment benefits at the same time?
It depends on the state. Some prohibit it. Some allow it but take the amount of your severance into consideration in calculating reduced unemployment benefits. Some allow double-dipping because they don't treat severance pay as income. Rules on collecting severance pay and unemployment are all over the map, so check with your state's unemployment office for guidance.
8. Can I claim the standard deduction and itemize deductions on my tax return?
No. You must pick either taking the standard deduction, which reduces your taxable income by an amount set by the government each year, or itemized deductions, which taxpayers might choose if their deductions add up to an amount greater than the standard deduction, reducing their taxable income even more. The IRS lists types of taxpayers who can't use the standard deduction, such as those who are married filing separately with a spouse who itemizes. Still, you're generally able to claim credits on top of the standard deduction.
9. Can I claim the American Opportunity Tax Credit (AOTC) or Lifetime Learning Credit (LLC) and withdraw from a 529 account tax- and penalty-free in the same year?
Not if you are using the same qualified higher education expenses for both the tax-free 529 withdrawal and the tax credit.
For example, the AOTC is 100% of the first $2,000 of qualified education expenses and 25% of the next $2,000 for a maximum credit of $2,500 on $4,000 worth of expenses. Let's say you have a total of $10,000 in qualified expenses. You can withdraw only $6,000 from a 529 tax-free ($10,000 minus the $4,000 that you already counted to claim the AOTC) and cover the rest with non-529 funds.
If you took out $10,000 from the 529, the $4,000 that qualified you for the AOTC would be considered nonqualified expenses, possibly subjecting you to federal and state income tax and a 10% early withdrawal penalty if you already claimed the AOTC.
By the way, you can only claim either the AOTC or the LLC (not both) for the same student in the same year, contingent on eligibility.