Do Roth 401(k) Contributions Affect Your Roth IRA Limit?

Roth 401(k) and Roth IRA accounts represent two distinct avenues for individuals to save for retirement with the advantage of tax-free withdrawals in their later years. Both account types encourage long-term savings by allowing contributions of after-tax dollars, meaning the money grows free of federal income tax, and qualified distributions in retirement are also tax-free. While they share this fundamental tax benefit, their contribution rules, eligibility requirements, and structural characteristics differ significantly.

Roth 401(k) Contribution Rules

Roth 401(k) plans are offered through an employer, allowing employees to contribute a portion of their pre-tax salary on an after-tax basis directly from their paycheck. For the 2025 tax year, employees can contribute up to $23,500 in elective deferrals to a Roth 401(k) or a traditional 401(k), or a combination of both.

Individuals aged 50 and older are permitted to make additional “catch-up” contributions to their Roth 401(k) accounts. For 2025, this catch-up contribution is an extra $7,500, bringing the total employee contribution limit to $31,000 for those aged 50 to 59 or 64 and older. A higher catch-up contribution of $11,250 applies to individuals aged 60, 61, 62, and 63, allowing them to contribute up to $34,750 in 2025.

Employer contributions, such as matching contributions or profit-sharing contributions, are typically made on a pre-tax basis, even if the employee’s elective deferrals are Roth. These employer contributions do not reduce the employee’s individual Roth 401(k) elective deferral limit. The total amount contributed to a 401(k) plan from both employee and employer sources is subject to a separate, higher overall limit, which is $70,000 for 2025.

Roth IRA Contribution Rules

Roth IRAs are individual retirement arrangements. The annual contribution limit for a Roth IRA for 2025 is $7,000. Similar to Roth 401(k)s, individuals aged 50 and over can make an additional catch-up contribution to their Roth IRA.

For 2025, the Roth IRA catch-up contribution amount is $1,000, allowing eligible individuals to contribute a total of $8,000. Roth IRAs have income limitations, determined by an individual’s Modified Adjusted Gross Income (MAGI). These income thresholds can reduce or completely eliminate an individual’s ability to make direct contributions to a Roth IRA.

As MAGI increases, the permissible contribution amount decreases, eventually reaching zero for those above the upper income threshold. For instance, in 2025, single filers with a MAGI below $150,000 can make a full contribution, but their ability to contribute is reduced for MAGI between $150,000 and $165,000, and no contribution is allowed at $165,000 or more. Similarly, for married couples filing jointly, a full contribution is allowed below $236,000 MAGI, with a reduced contribution between $236,000 and $246,000, and no contribution at $246,000 or more. It is important to note that contributions to a Roth IRA cannot exceed an individual’s earned income for the year.

Independent Contribution Limits

The contribution limits for Roth 401(k) accounts and Roth IRA accounts are entirely separate and operate independently. Contributing the maximum amount to a Roth 401(k) does not reduce or otherwise affect an individual’s ability to contribute to a Roth IRA. This holds true as long as the individual meets the specific income eligibility requirements for the Roth IRA.

These two types of retirement savings vehicles are governed by different sections of the tax code, each with its own distinct contribution ceilings. An individual who qualifies can contribute the maximum allowable amount to both a Roth 401(k) and a Roth IRA in the same tax year. This allows for a significant dual approach to tax-advantaged retirement savings, maximizing the benefits of tax-free growth and withdrawals in retirement.