Question: Can I still have a traditional IRA if I contribute to my 401(k) plan at work?
Answer :

Yes. Anyone with earned income who is under age 70½ can open and contribute to a traditional IRA. The contribution limit is $5,000 for 2009 and 2010, plus an additional "catch-up" contribution of $1,000 in 2009 and 2010 if you're 50 or older. However, you may not be able to deduct your IRA contributions if you're covered by a 401(k) plan at work. Whether or not you can deduct your IRA contributions depends on your filing status and annual income (adjusted gross income, or AGI). Specifically, for tax year 2010:

If your filing status is:

Your IRA deduction is reduced if your AGI is between:

Your deduction is eliminated if your AGI is:

Single or head of household


$66,000 or more

Married filing jointly or qualifying widow(er)


$109,000 or more

Married filing separately


$10,000 or more

You may also qualify for a partial tax credit for amounts contributed to your traditional IRA or your 401(k) plan.