Yes, you can hold both a Roth IRA and a traditional IRA simultaneously

The IRS allows you to own both account types at the same time. There is no rule against it. The catch is that your total contributions across both accounts in a single year cannot exceed the annual limit — currently $7,000 if you are under 50, or $8,000 if you are 50 or older. If you contribute $4,000 to a Roth and $4,000 to a traditional IRA in the same year, you have hit your limit. You cannot contribute another dollar to either account until the next calendar year.

The reason people do this is usually to split their money between the tax break now (traditional) and the tax break later (Roth). Some do it because they change jobs or income levels and want to hedge their bets about which account type will serve them better in retirement. Others inherit an IRA from a spouse and keep it separate from their own.

Key Takeaways

  • You can own a Roth and a traditional IRA in the same year, but your combined contributions to both accounts cannot exceed $7,000 (or $8,000 if you are 50 or older).
  • If you earn too much to contribute to a Roth, you can still contribute to a traditional IRA, and vice versa — income limits apply to each account type separately.
  • Withdrawals from each account follow different rules: Roth withdrawals are tax-free if the account is at least five years old, while traditional IRA withdrawals are taxed as ordinary income.
  • If you have a traditional IRA and want to convert money to a Roth, that conversion counts as a taxable event in the year you do it, but does not count against your annual contribution limit.

How the contribution limit works when you have both accounts

The $7,000 annual limit (for 2024, under age 50) is a combined ceiling. It applies to all your IRAs together — Roth, traditional, SEP, and SIMPLE. If you contribute $3,000 to a traditional IRA in January and then try to add $5,000 to a Roth IRA in June, you have exceeded the limit by $1,000. The IRS will expect you to withdraw that overage, plus any earnings on it, before your tax filing deadline.

The limit resets on January 1 each year. If you max out both accounts in 2024, you start fresh in 2025 with another $7,000 to split however you choose.

Income limits, however, apply separately to each account type. You might earn too much to contribute to a Roth but still be able to contribute to a traditional IRA. Or you might have a workplace 401(k) that phases out your traditional IRA deduction, but a Roth remains open to you. Check the income thresholds for each account type in the year you plan to contribute.

Tax deductions and income limits for each account

A traditional IRA contribution may be tax-deductible in the year you make it, but only if you meet income requirements. If you or your spouse has a workplace retirement plan (like a 401(k) or 403(b)), your ability to deduct a traditional IRA contribution phases out at higher incomes. For 2024, if you are single and covered by a workplace plan, the deduction phases out between $77,000 and $87,000 of modified adjusted gross income. If you are married filing jointly and your spouse has a workplace plan, it phases out between $123,000 and $143,000.

A Roth IRA contribution has its own income limits, separate from the traditional IRA limits. For 2024, if you are single, you can contribute the full amount if your income is below $146,000. The ability to contribute phases out between $146,000 and $161,000. If you are married filing jointly, the phase-out range is $230,000 to $240,000.

Because these limits are independent, it is possible to be phased out of a Roth but still able to deduct a traditional IRA contribution — or vice versa. This is one reason people maintain both accounts.

Conversions from traditional to Roth do not count against the contribution limit

If you convert money from a traditional IRA to a Roth IRA, that conversion does not reduce your annual contribution room. You can still contribute $7,000 to either account in the same year you convert $50,000 from traditional to Roth. The conversion itself, however, is a taxable event. You owe income tax on the amount converted in the year you do it.

This is why conversions are sometimes done strategically. If you have a large traditional IRA balance and expect to be in a lower tax bracket in a particular year, you might convert part of it to a Roth and pay the tax at that lower rate. The money then grows tax-free in the Roth forever.

Withdrawal rules differ between account types

Money in a traditional IRA is taxed as ordinary income when you withdraw it. You must begin taking required minimum distributions (RMDs) at age 73 (as of 2023, under current law). If you withdraw money before age 59½, you typically owe a 10 percent early withdrawal penalty plus income tax, unless an exception applies.

Money in a Roth IRA can be withdrawn tax-free and penalty-free once the account has been open for at least five years and you are age 59½. You are never required to take distributions from a Roth during your lifetime. Contributions (not earnings) can be withdrawn anytime without tax or penalty. Earnings can be withdrawn early only in specific circumstances, such as a first-time home purchase (up to $10,000 lifetime) or a may have access to disability.

Because the withdrawal rules are so different, having both accounts gives you flexibility in retirement. You can draw from the traditional IRA to cover living expenses and taxes, and let the Roth grow untouched if you do not need it.

Inherited IRAs and spousal rollovers

If you inherit an IRA from someone other than a spouse, you must open an inherited IRA account in your name. You cannot roll it into your own IRA. This means you may end up with multiple IRAs — your own Roth, your own traditional, and one or more inherited accounts. Each has its own withdrawal rules and RMD requirements.

If you inherit an IRA from your spouse, you have the option to treat it as your own by rolling it into your existing IRA or opening a new one in your name. Many people do this to simplify their accounts, but you are not required to. You can keep the inherited IRA separate if you prefer.

Frequently Asked Questions

Do I have to split my contribution limit equally between a Roth and traditional IRA?

No. You can put all $7,000 into one account and nothing into the other, or split it any way you choose — $2,000 and $5,000, $6,500 and $500, whatever works for your situation. The only rule is that the total across all your IRAs cannot exceed the annual limit.

What happens if I contribute too much to both accounts by mistake?

You have until your tax filing deadline (usually April 15 of the following year) to withdraw the excess contribution plus any earnings on it. If you do not, the IRS will tax the overage twice — once in the year you contributed it and again when you eventually withdraw it. File Form 5329 with your tax return to report the excess and the withdrawal.

Can I have a Roth IRA and a traditional IRA if I also have a 401(k)?

Yes. A 401(k) is a workplace plan and does not count toward your IRA contribution limit. You can contribute to a 401(k) and also contribute to both a Roth and traditional IRA in the same year, as long as your combined IRA contributions do not exceed $7,000. However, having a 401(k) may affect whether you can deduct a traditional IRA contribution based on income limits.

If I convert a traditional IRA to a Roth, do I owe taxes on the whole amount?

You owe taxes only on the portion that was not already taxed. If your traditional IRA contains only pre-tax contributions and earnings, you owe tax on the full conversion amount. If it contains after-tax contributions (nondeductible contributions), only the earnings and pre-tax portion are taxable. Keep records of any nondeductible contributions you made.

Can I withdraw from one IRA without touching the other?

Yes. Each account is separate. You can withdraw from your traditional IRA and leave your Roth untouched, or vice versa. However, if you are subject to required minimum distributions at age 73, the RMD rules apply to all your traditional IRAs combined — you cannot avoid the requirement by keeping one account separate.