Can I Contribute to Both a Roth and Traditional IRA?

An Individual Retirement Arrangement (IRA) is a personal savings vehicle designed to help individuals save for retirement with tax advantages. It is possible to hold both a Roth and a Traditional IRA simultaneously. However, a single, combined limit applies to the total amount you can contribute across all your IRAs in a given year.

Key Characteristics of Roth and Traditional IRAs

Traditional IRAs generally allow contributions to be tax-deductible in the year they are made, depending on your income and whether you are covered by a retirement plan at work. The funds within a Traditional IRA grow on a tax-deferred basis, meaning taxes are not paid on earnings until retirement. When you withdraw money in retirement, these distributions are typically taxed as ordinary income.

Conversely, Roth IRAs are funded with after-tax dollars, which means your contributions are not tax-deductible. A significant benefit of a Roth IRA is that qualified withdrawals in retirement are completely tax-free. For a withdrawal to be qualified, the account must have been open for at least five years, and the account holder must be age 59½ or older, disabled, or using the funds for a first-time home purchase, up to a lifetime limit.

Combined Annual Contribution Limits

For 2025, individuals under age 50 can contribute up to $7,000 to their IRAs. Those age 50 and over are permitted an additional “catch-up” contribution of $1,000, bringing their total annual limit to $8,000.

The sum of all contributions to both Roth and Traditional IRAs cannot exceed these limits. For example, if you contribute $4,000 to a Traditional IRA, you can only contribute an additional $3,000 to a Roth IRA, assuming you are under age 50. Your total contributions across all IRAs also cannot exceed your earned income for the year.

Income Limitations for Contributions

The ability to contribute to certain IRAs or deduct contributions can be affected by your income level. For Roth IRAs, the eligibility to make direct contributions is subject to Modified Adjusted Gross Income (MAGI) phase-out ranges. For 2025, single filers or those married filing separately (who did not live with their spouse) can make a full Roth IRA contribution if their MAGI is less than $150,000. The ability to contribute is gradually reduced for MAGIs between $150,000 and $165,000, and no direct contributions are allowed at or above $165,000.

For those married filing jointly or who are qualifying widow(er)s, the full contribution threshold for 2025 is a MAGI under $236,000. Contributions are phased out for MAGIs between $236,000 and $246,000, and direct contributions are eliminated at $246,000 or more. While there are no income limits to contribute to a Traditional IRA, the deductibility of those contributions depends on whether you or your spouse are covered by a workplace retirement plan.

If you are covered by a workplace retirement plan, the deduction for Traditional IRA contributions begins to phase out for single filers with a MAGI between $79,000 and $89,000 in 2025. For those married filing jointly where both spouses are covered by a workplace plan, the deduction phases out for MAGIs between $126,000 and $146,000. If one spouse is covered by a workplace plan and the other is not, the non-covered spouse’s deduction phases out for MAGIs between $236,000 and $246,000.

When income limits prevent direct Roth IRA contributions, a “backdoor Roth” strategy can be considered. This involves making a non-deductible contribution to a Traditional IRA, for which there are no income limits, and then converting those funds to a Roth IRA. This method allows individuals with higher incomes to still get funds into a Roth account, bypassing direct contribution restrictions. However, this strategy introduces complexities, particularly if you hold other pre-tax Traditional IRA balances due to the pro-rata rule.

IRA Conversion Rules

Converting funds from a Traditional IRA to a Roth IRA is generally a taxable event, especially if the Traditional IRA contains pre-tax contributions. When you convert, any portion of the converted amount that represents previously untaxed contributions or earnings will be included in your taxable income for the year of conversion. This tax liability must be paid from sources outside the IRA, as using the converted funds to pay taxes can incur additional penalties.

The “pro-rata rule” applies if you have both pre-tax (deductible) and after-tax (non-deductible) money across all your Traditional IRAs. The IRS views all your Traditional IRA accounts as a single entity. When you convert funds, the conversion is considered to be made proportionally from both your pre-tax and after-tax balances, regardless of which specific IRA account the money is converted from. This means you cannot simply choose to convert only your non-deductible contributions tax-free if you also have pre-tax funds.

There are no income limitations for converting a Traditional IRA to a Roth IRA, making it a viable option for those who exceed the direct Roth contribution income thresholds. After a conversion, a separate five-year waiting period applies to the converted amounts. If you withdraw converted funds before this five-year period has passed, and if you are under age 59½, the converted amount may be subject to a 10% early withdrawal penalty, in addition to any income taxes already paid on the conversion. This five-year period begins on January 1 of the tax year in which the conversion occurs.