Can I Contribute to an IRA if I Have a 401(k) That I Don't Use?

by Ciaran John, studioD

Many people make contributions to both individual retirement accounts (IRA), and employer sponsored pension plans such as a 401(k) plan. If you have no access to an employer sponsored pension plan, then you can contribute to an IRA regardless of your income level. However, income limits do apply to employees who have access to retirement plans through work. Furthermore, if you are married, your contributions to your IRA are also limited if your spouse has access to a 401(k) through work. Income limits apply to IRAs, even if you and your spouse choose not to contribute work-sponsored retirement plans.


IRAs and 401(k) plans are both funded with tax-deductible contributions, and the money that you invest in these retirement plans grows tax deferred. To prevent you from shielding all of your money from taxes in the current year, the IRS imposes annual contribution limits on both of these account types. As of 2011, you can make an annual investment of $5,000 in an IRA. if you are age 50 or older, you can contribute up to $6,000, per year. You can also contribute up to $16,500, into your 401(k) until your reach the age of 50, after which you can contribute up to $22,000. However, your total annual contributions to your IRA and 401(k) cannot exceed your earned income for the year.

Single Tax Filer

If you file your taxes as a single person or a head of household, and you have access to a 401(k) at work, you can only make the maximum contribution to your IRA if your modified adjusted gross income (MAGI) does not exceed $56,000. Your MAGI consists of your taxable income, known as your adjusted gross income (AGI), plus money that you deducted from your AGI such as the money you contributed to your IRA. You can contribute a reduced amount to your IRA if you have a MAGI of more than $56,000, but less than $66,000. You cannot make a contribution for the current tax year as a single filer, or head of household if you have a MAGI of $66,000 or more.


If you are married and file your taxes jointly and have access to a 401(k) plan, then you are not allowed to contribute to your IRA unless your MAGI is less than $110,000. You can make a partial contribution if your MAGI exceeds $90,000 but amounts to less than $110,000. If you have a MAGI of $90,000 or less, then you can make the full contribution. If you are married filing separately and have access to a 401(k), then you cannot make a full contribution but you can make a reduced contribution if you have a MAGI below $10,000.


If you have no access to a 401(k), but your spouse has 401(k) access, then you have to contend with income limits even if your spouse does not contribute to a 401(k) plan. If you file separately, you cannot make a full IRA contribution, but you can make a partial contribution as long as your MAGI falls below $10,000. If you file jointly, you can contribute fully with a MAGI of $169,000, or less and you can make a partial contribution if your MAGI exceeds that sum, but is less than $179,000. If you earn $179,000 or more, you cannot contribute to an IRA.

About the Author

Ciaran John began writing in 1994 with contributions to "The Hourly Press" and "The Sawbridgeworth Observer," and has since written for many online and print publications. He has 12 years experience working for financial services companies as a business banker, lender and investment representative and spent four years working in human resources.

Photo Credits

  • Businessman Holding A Golden Nest Egg image by Scott Maxwell from