There’s no one right way to save for retirement. There are many possible strategies to help maximize your efforts. One way to save more each year is to contribute to a Roth IRA in addition to an employer’s 401(k) plan. Not only is having both a Roth IRA and a 401(k) allowed by the IRS, but having both could also help you build a bigger nest egg. Even if you earn too much for a Roth, you have other options to use these 2 powerful savings tools at the same time.
Can you have a Roth IRA and a 401(k)?
Yes, you can have a Roth IRA and a 401(k) if you're eligible to contribute to your employer's 401(k) plan and you qualify to contribute to a Roth IRA. While it’s easy to find out if you're eligible to contribute to your employer's 401(k)—ask your benefits department—knowing whether you meet the IRS qualifications for contributing to a Roth IRA can be trickier.
Along with income limits that dictate whether you're eligible to contribute to a Roth IRA, the IRS also sets limits on how much you can contribute to your Roth IRA each year.
The annual contribution limit for IRAs, including Roth and traditional IRAs, is $7,500 for 2026. If you're age 50 or older, you can contribute an additional $1,100 for 2026.
For 2026, you can make full contributions to your Roth IRA if your modified adjusted gross income (MAGI) is less than $153,000 for a single adult and $242,000 if married and filing jointly.
Read more on Roth IRA contribution and income limits and 401(k) contribution limits.
What’s the difference between a Roth IRA and a 401(k)?
The biggest difference between a Roth IRA and a 401(k) is that a 401(k) is offered by (and opened through) your employer, while a Roth IRA can be opened on your own through a financial services custodian such as Fidelity. When you contribute to a traditional 401(k), typically the money is taken out of your paycheck before you pay taxes. This reduces your taxable income for the year (though some plans do allow you to make after-tax traditional 401(k) contributions). Roth IRA contributions, on the other hand, are made with after-tax dollars, so they will not reduce your taxable income. Many employers also offer a match on 401(k) contributions up to a certain percentage of your salary—say, 3% or more—which can boost the amount that goes into your account each year. That is not available for Roth IRAs, as they are not connected to your employer.
In both account types, you can invest your contributions in securities including mutual funds, and those investments have the potential to grow tax-deferred while you save.1 With a 401(k), you’ll typically pay income taxes once you begin making withdrawals—though not on any after-tax contributions—and if you withdraw before age 59½ you may also pay a penalty. 401k plans do have a benefit over IRAs for early withdrawals, however. You can withdraw penalty free if you leave your employer sponsoring the plan in or after the year you turn 55. With a Roth IRA, you can withdraw as much as you’ve contributed—but not any investment earnings—at any time for any reason without paying taxes or penalties. If you’ve had the account open for at least 5 years and you’re over 59½ years old or you meet certain other qualifications, then you may be able to withdraw investment earnings tax-free and penalty-free.
Some employers offer a second type of 401(k). A Roth 401(k) is a kind of hybrid between a Roth IRA and a 401(k) with some rules from each kind of plan. In a Roth 401(k), you invest after-tax money today and don't pay income taxes on your withdrawals in retirement. Learn more about contributing to a Roth vs. traditional 401(k).
Benefits of having a Roth IRA and a 401(k)
From increasing your annual retirement savings to potential tax breaks—both today and in retirement—Roth IRAs and 401(k)s could deliver on multiple levels when used together.
While the $24,500 401(k) contribution limit for 2026 for employees under 50 is nothing to sneeze at, adding a Roth IRA (or a traditional IRA, for that matter) into the mix kicks things up a notch, allowing you to save an additional $7,500 on top of your 401(k) contributions. Catch-up contributions allow those 50 or older to invest even more.
A 401(k) catch-up contribution lets you contribute additional money to your 401(k) if you're at least age 50 at the end of the calendar year. For 2026, the 401(k) catch-up contribution is $8,000 (or $11,250 if age 60–63) above the normal contribution limit of $24,500.
According to the SECURE 2.0 Act’s higher earner rule, in 2026, catch-up contributions for earners whose FICA wages (typically Box 3 of Form W-2) exceed $150,000 in the previous tax year, must be designated as Roth after-tax contributions.
If your employer's plan does not offer a Roth contribution feature and you fall under the high-earner rule, you won’t be able to make catch-up contributions to that plan.
Unlike a traditional IRA or a traditional 401(k), the Roth IRA is one of the few tax-advantaged accounts that allows you to withdraw the money you’ve contributed at any time for any reason without paying taxes or penalties. This means you can access some of your retirement savings in an emergency without adding to debt or selling assets in a taxable account, which could have tax implications. Though it’s generally best to build up emergency savings with $1,000 or more separately from retirement savings, knowing you can access those Roth IRA contributions if you really needed them could set your mind at ease. Your Roth IRA could serve as a source of backup emergency savings. Roth 401(k)s don't allow for withdrawals of just contributions. If taking a Roth 401(k) withdrawal, a portion of the withdrawal may be earnings.
Investing in a Roth IRA and a 401(k) offers potential tax advantages now and in the future. While contributions to a Roth IRA aren’t tax deductible, earnings grow tax-deferred while you save, and qualified withdrawals during retirement are generally tax-free. With a traditional 401(k), it’s reversed: Pre-tax contributions today reduce your taxable income which can, in turn, reduce that year’s tax bill. Any investment growth on pre-tax contributions in a traditional 401(k) is tax-deferred, and in retirement your withdrawals are taxed at your current income tax rate, except for any after-tax money you might have contributed.
With the ability to choose between tax-free and taxable withdrawals, you can potentially save on taxes by managing your taxable income in retirement. For instance, if you choose to work part-time and still have taxable income, taking qualified withdrawals from your Roth IRA won’t bump you to a new tax bracket like taxable withdrawals from a 401(k) might. If you paired your 401(k) with a traditional IRA, withdrawals from both of those accounts would be taxable and may increase the amount of income taxes you pay in retirement.
Another difference between a 401(k) or traditional IRA and a Roth IRA is that you’re not required to withdraw money from a Roth IRA after a certain age, whereas you must start taking RMDs from most traditional 401(k) plans and traditional IRAs after age 73. This gives you more flexibility in retirement to use the money in your Roth IRA when it best suits you. This also means you could choose to leave extra money in your Roth IRA—tax-free—to your loved ones after you’re gone. Just remember, inherited Roth IRAs have required minimum distributions, which will affect your heirs.
What to do if you can’t contribute to a Roth IRA and a 401(k)
If you can’t have both a Roth IRA and a 401(k), you still have options to help supercharge retirement savings.
If your 401(k) offers any sort of employer match—be sure to ask up to how much if they do—Fidelity suggests making the contributions required to get that full match because a match is like free money. Who would want to leave that on the table? For instance, if your employer matches 100% of the first 3% of your salary, make sure you’re contributing at least 3% of your salary to your 401(k).
Check if your employer offers a Roth 401(k)—most do. This can be an easy way into potentially tax-free withdrawals in retirement2 if you don’t qualify for a Roth IRA. And even if you do qualify for a Roth IRA, it may make sense for you to contribute to a Roth 401(k) to take advantage of the higher contribution limits and any match an employer might offer. Just remember, Roth 401(k) contributions follow the same rules as pre-tax contributions, such as to a traditional 401(k). For example, you won’t be able to withdraw your Roth 401(k) assets without potentially paying a penalty on any portion that is earnings until age 59½, or if separating from service in or after the year you turn 55, or you experience another qualifying event such as disability, termination of employment, or financial hardship.
If you don’t have access to a 401(k) or another workplace retirement plan, or you make too much to qualify for a Roth IRA, you could opt to open a traditional IRA. Both IRA types have the same annual contribution limits. If you meet income requirements, contributions to a traditional IRA might be tax deductible,3 but withdrawals in retirement are generally taxable.4 Consult a tax advisor to be sure of the tax differences between a traditional IRA and a Roth IRA.
If you’re self-employed or an independent contractor, you may have some of the same retirement plan options as small-business owners, including the SEP IRA, SIMPLE IRA, and self-employed 401(k). These plans all have different tax benefits, qualifications, and ways to contribute, so research your options and consult a tax advisor to help you choose the best one for your situation.
High earners who can’t contribute to a Roth IRA or deduct traditional IRA contributions can potentially convert traditional IRA or 401(k) funds into a Roth IRA. There are no income limits on Roth conversions and no limits on how much you can convert, but it comes with federal and potentially state tax bills, so check with your tax advisor to understand the full tax impact. Generally, you’ll only be able to transfer a 401(k) to a Roth IRA if you are rolling over your 401(k) or the plan allows in-service withdrawals. Another option that may be available to you is an in-plan Roth conversion. If your employer offers a Roth 401(k) option, you may be able to convert your existing pre-tax and after-tax balances to a Roth account within the plan. Some employers even offer an auto-convert feature inside their plan. You can set it up so that any after-tax contributions (if your plan allows them) are automatically converted to a Roth 401(k) at regular intervals.
How to start investing in a Roth IRA and a 401(k)
If you qualify for both account types, here’s how to get started with a 401(k) and Roth IRA.
Your benefits department can get you all the information you need to enroll in your 401(k) and start choosing your investments.
You can open a Roth IRA on your own through a financial services custodian such as Fidelity. Once you start contributing money into the account, you can start investing on your own, get help building an investment strategy, or even have your investments managed for you.
Choose how much you’ll contribute from each paycheck to your 401(k). Remember: You’ll typically want to contribute enough to your 401(k) to get the full employer match if possible. Next, consider setting up recurring deposits to your Roth IRA on payday. Have a specific investment or multiple investments you'd like to buy over time? Think about setting up recurring investments too. Just make sure you don’t go over the annual contribution limit. If you do, you could face penalty fees.
Even the best portfolios need a bit of tweaking over time. Be sure to review your portfolios annually and consider meeting with a financial professional as your life, income, and goals change. An extra set of eyes could help keep your retirement savings working hard for your future.