So I was wondering if I can contribute to both an IRA and 401k in the same year, and turns out it's actually pretty doable for most of us. The real question is whether it makes sense for your situation.

Basically here's the deal: you can put up to $23,000 into a 401(k) in 2024 (or $30,500 if you're 50+), and separately you can add up to $7,000 to an IRA ($8,000 if you're 50+). The key thing to remember is those limits apply across all accounts of each type, so if you've got multiple IRAs, that $7,000 total is split between all of them.

Most people don't run into issues doing both at once. The tricky part comes if you're making decent money. That's when you hit some income limits that can mess with your tax deductions, especially on the IRA side.

Here's where it gets interesting. If you're covered by a workplace retirement plan and you're a single filer, you can make fully deductible traditional IRA contributions if your income stays under $77,000. Between $77,000 and $87,000 you can do partial deductions, and over $87,000 you're locked out of deductible contributions entirely. Married couples filing jointly have higher thresholds but the same three-tier system applies.

Now, if you're asking can I contribute to an IRA and 401k when I can't deduct my IRA contributions, the answer is still yes. You can make nondeductible contributions up to the limit. Your money grows tax-deferred even though you paid taxes upfront, which is different from a Roth where everything grows completely tax-free.

Some people actually use this as a backdoor strategy to convert nondeductible IRA funds into Roth accounts, which gets pretty clever tax-wise. But honestly if that sounds too complicated, you might just want to max out your 401(k) and call it a day.

One thing worth considering: can I contribute to both accounts if I want to save even more? Yeah, you could also throw money into a health savings account if you've got access to one. They're technically for medical expenses but a lot of people use them as stealth retirement accounts since you can invest the balance.

The bottom line is yes, you absolutely can contribute to a 401k and IRA simultaneously, but whether you should depends on your income level and whether you can actually get the tax benefits. If you're borderline on those income limits, it's worth sitting down with the numbers before you commit your money.