Can You Have Both a Roth and Traditional IRA? Understanding the Rules

When it comes to saving for retirement, IRAs are a fantastic tool. But with both Traditional IRAs and Roth IRAs available, many people wonder: Can I have both at the same time?

The short answer? Yes, you can. But, of course, the IRS has rules—because they always do. Having both types of IRAs can be a smart move, helping you balance your tax advantages now and in retirement. However, contribution limits, income restrictions, and tax rules come into play, and you need to navigate them carefully to get the most out of your savings.

Let’s break it all down, so you can figure out whether having both a Traditional and Roth IRA is the right move for you—and how to do it without running into tax trouble.

1. The Difference Between an IRA and a Roth IRA

Before we dive into the rules, let’s clear up a common confusion: What’s the difference between an IRA and a Roth IRA?

Technically, "IRA" refers to any Individual Retirement Account, including both Traditional and Roth IRAs. However, when people say “IRA,” they often mean a Traditional IRA—which has different tax treatment than a Roth IRA.

Here’s the key difference:

• Traditional IRA: Contributions may be tax-deductible, and your money grows tax-deferred. But when you withdraw funds in retirement, you pay taxes on every dollar you take out.
• Roth IRA: Contributions are made with after-tax money (so no tax deduction), but your money grows tax-free and you don’t pay any taxes on withdrawals in retirement.

This fundamental tax difference is why many people choose to have both. The combination allows for a mix of tax-deferred and tax-free income in retirement, which can help with tax planning down the road.

2. Yes, You Can Have Both—But There’s a Catch

The IRS allows you to contribute to both a Traditional IRA and a Roth IRA in the same year. However, you can’t double your contributions just because you have two accounts. The annual IRA contribution limit applies to both accounts combined.

For 2025, the contribution limit is:

• $7,000 total if you're under 50
• $8,000 total if you're 50 or older (thanks to the catch-up contribution)

That means if you contribute $4,000 to a Roth IRA, you can only put $3,000 into a Traditional IRA (assuming you're under 50). The total cannot exceed $7,000 across both accounts.

3. Income Limits Can Restrict Roth IRA Contributions

While anyone with earned income can contribute to a Traditional IRA, Roth IRAs have income limits that may affect your ability to contribute.

For 2025, the income phase-out ranges for Roth IRA contributions are:

• Single filers: $150,000 – $165,000
• Married filing jointly: $236,000 – $246,000

If you earn above these limits, you cannot contribute directly to a Roth IRA. However, you can still contribute to a Traditional IRA—though whether you can deduct those contributions depends on whether you have a workplace retirement plan (like a 401(k)) and your income.

4. Tax Deduction Rules for Traditional IRA Contributions

Just because you can contribute to a Traditional IRA doesn’t mean your contributions will be tax-deductible.

If you (or your spouse) have a 401(k) or similar plan at work, your ability to deduct contributions to a Traditional IRA depends on your income. The phase-out ranges for 2025 are:

• Single filers: $79,000 – $89,000
• Married filing jointly (if covered by a workplace plan): $126,000 – $146,000

If your income is above these limits, you can still contribute to a Traditional IRA, but your contributions won’t be deductible—you’ll be making a nondeductible IRA contribution instead.

5. Why You Might Want Both a Roth and Traditional IRA

So, why would you bother juggling both types of IRAs instead of just choosing one? The biggest advantage is tax diversification.

• If you expect your tax rate to be lower in retirement, a Traditional IRA might be better because you get a tax break now and pay taxes later at a lower rate.
• If you expect your tax rate to be higher in retirement, a Roth IRA makes more sense since you're locking in today’s tax rate and enjoying tax-free income later.

By having both, you can withdraw from the account that gives you the most favorable tax treatment at any given time—helping you manage your tax bill in retirement.

6. Using a Roth Conversion to Work Around Income Limits

If you earn too much to contribute to a Roth IRA directly, there’s a legal workaround called the Backdoor Roth IRA.

Here’s how it works:

1. You contribute to a Traditional IRA (which has no income limit).
2. You then convert that money into a Roth IRA.
3. You pay taxes on the converted amount, since Roth IRA contributions are after-tax.

This strategy allows high-income earners to get money into a Roth IRA even if they’re above the income limits. Just be careful—if you already have pre-tax money in a Traditional IRA, the IRS may apply the pro-rata rule, which can complicate taxes.

7. Required Minimum Distributions (RMDs): A Key Difference

Another reason to have a Roth IRA? Traditional IRAs require withdrawals starting at age 73, called Required Minimum Distributions (RMDs).

Roth IRAs? No RMDs at all. That means your money can keep growing tax-free for as long as you want, making it a great tool for both retirement and estate planning.

8. Employer Plans and IRA Contributions

If you already contribute to a 401(k) or similar plan at work, you can still contribute to an IRA. However, your ability to deduct Traditional IRA contributions might be limited.

Many people use a Roth IRA alongside a 401(k) for tax diversification, since most workplace plans are pre-tax like a Traditional IRA. By having both, you can build both tax-free and tax-deferred retirement income.

Conclusion: The Best of Both Worlds?

Yes, you can have both a Roth IRA and a Traditional IRA, and for many people, it’s a smart strategy. By maxing out contributions (if possible) and balancing taxable and tax-free withdrawals, you’ll have more flexibility in retirement and potentially lower your overall tax burden.

But the key is to understand the rules. Make sure you’re aware of contribution limits, income restrictions, and deduction rules before deciding how to split your contributions between the two.

If you’re unsure, consider talking to a financial advisor—they can help you figure out the best strategy based on your income, tax situation, and retirement goals.

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