Can You Have Both a Roth IRA and a Traditional IRA?

10 December 2025

Planning for retirement can feel overwhelming, right? With all the different investment options, tax advantages, and contribution limits, it’s easy to feel lost in a sea of financial jargon. One of the most common questions people ask is: Can you have both a Roth IRA and a Traditional IRA?

The short answer? Yes, absolutely! But there's a catch—you need to understand how contributions work, the tax implications, and if it’s the right strategy for your financial goals. Let’s dive deeper!

What Are Roth IRA and Traditional IRA?

Before we discuss having both, it's important to understand what each of these accounts offers.

Traditional IRA: Tax Break Now, Taxes Later

A Traditional IRA is a tax-deferred retirement account. That means:

- Your contributions may be tax-deductible, helping lower your taxable income today.
- The money grows tax-deferred until you withdraw it in retirement.
- When you take money out in retirement, you’ll pay taxes on both contributions and earnings.

This type of IRA benefits people who expect to be in a lower tax bracket in retirement—saving on taxes now and paying less later.

Roth IRA: Pay Taxes Now, Enjoy Tax-Free Withdrawals Later

A Roth IRA works the other way around:

- You contribute after-tax money, meaning you don’t get a tax deduction upfront.
- The money grows tax-free (huge advantage!).
- In retirement, you withdraw both contributions and earnings tax-free (as long as you meet the withdrawal rules).

This account is ideal if you expect to be in a higher tax bracket later—pay taxes now so you won’t have to worry about them later.

Can You Contribute to Both a Roth IRA and a Traditional IRA?

Yes! The IRS allows you to contribute to both a Roth IRA and a Traditional IRA in the same year. However, there are a few important rules:

1. Contribution Limits Apply to Both Combined

The contribution limit for IRAs (both Roth and Traditional combined) in 2024 is:

- $7,000 per year if you’re under 50.
- $8,000 per year if you’re 50 or older (thanks to the catch-up contribution).

For example, if you contribute $3,500 to a Roth IRA, you can only contribute $3,500 to a Traditional IRA that year.

2. Your Income Affects Roth IRA Eligibility

Not everyone can contribute to a Roth IRA because there are income limits. In 2024:

- If you’re single, your modified AGI (Adjusted Gross Income) must be below $161,000 to make the full contribution.
- If you’re married filing jointly, your AGI must be below $240,000 to contribute fully.

If your income exceeds these limits, your ability to contribute phases out, and at a certain point, you can’t contribute at all.

3. Tax Deductibility for Traditional IRA Contributions Depends on Your Income and Workplace Retirement Plan

Your ability to deduct Traditional IRA contributions depends on whether you (or your spouse) are covered by a retirement plan at work, like a 401(k). If you aren’t covered, you can generally deduct the full amount.

However, if you are covered, the deduction phases out based on your income. In 2024:

- For single filers, deductions phase out between $77,000 and $87,000 of AGI.
- For married couples filing jointly, the phase-out is $123,000 to $143,000 if you’re covered by a workplace plan.
- If your spouse is covered, but you aren't, the phase-out range is $230,000 to $240,000.

Why Would You Want Both a Roth IRA and a Traditional IRA?

If you can contribute to both, why would you want to? Here are some solid reasons:

1. Tax Diversification for Retirement

Tax laws change. Your income changes. Life is unpredictable. Having both types of IRAs lets you decide in retirement whether to pull income from a taxable account (Traditional IRA) or a tax-free account (Roth IRA), depending on your tax situation.

Think of it like having different buckets of money—some taxable, some tax-free. You can be flexible with withdrawals to minimize taxes.

2. Hedge Against Future Tax Rate Uncertainty

No one can predict future tax rates, but chances are, they’ll go up, not down. By having both types of accounts, you’re hedging your bets. If tax rates rise, you’ll be thankful for your Roth IRA. If they stay low, your Traditional IRA withdrawals will be taxed at a lower rate.

3. Early Access to Roth IRA Contributions

One major advantage of a Roth IRA is that you can withdraw your contributions (not earnings) at any time, tax and penalty-free. This can serve as a backup emergency fund—you can’t do that with a Traditional IRA without paying taxes and a penalty.

4. Required Minimum Distributions (RMDs) Only Apply to Traditional IRAs

Traditional IRAs require you to start taking withdrawals at age 73 (RMDs). Roth IRAs? No RMDs required during your lifetime.

If you want to leave assets to your heirs, a Roth IRA is a fantastic tool, as it allows for tax-free inherited withdrawals.

When Does It Make Sense to Contribute to Both?

Here’s when having both a Roth and a Traditional IRA is a smart move:

- You’re in a middle tax bracket and want flexibility in retirement income.
- You expect your income to rise significantly in the future but still want some current tax breaks.
- You have a 401(k) at work but want additional tax-advantaged savings.
- You’re concerned about Required Minimum Distributions (RMDs) and want a tax-free option later.

Some financial planners suggest a 50/50 split between Roth and Traditional IRA contributions to maximize tax diversification.

How to Decide What’s Best for You

Not sure what’s right for you? Here’s a quick guide:

1. If you expect to be in a higher tax bracket in retirement: Focus more on Roth IRA contributions so you can avoid future taxes.
2. If you expect to be in a lower tax bracket in retirement: Prioritize your Traditional IRA for tax savings now.
3. If you're unsure (or want flexibility): Split your contributions between both accounts!

Either way, taking action today will put you on the right path for a comfortable retirement.

Final Thoughts

Yes, you can absolutely have both a Roth IRA and a Traditional IRA. Doing so provides tax diversification, flexibility, and multiple ways to optimize your retirement income. While contribution limits and income restrictions apply, strategically managing both accounts can help you maximize savings and minimize taxes.

If you're still unsure what’s best for your situation, consider speaking with a financial advisor—they can help tailor a strategy based on your goals and tax situation.

Retirement planning doesn’t have to be overwhelming. Just take it one step at a time—your future self will thank you!