Recently, this question was asked over at NerdWallet's Ask an Advisor:"What is the Maximum Amount of Pre-Tax Retirement Savings I can Save in a Year?" The questioner provided some additional context and here was my response, in case you've ever wondered the same:
You can make contributions to both your 401(k) and to an IRA. The 401(k) contribution through payroll will be deductible (pre-tax), unless your employer's plan has a Roth 401(k) option and you're using it. Whether your IRA contribution will be deductible (pre-tax) will depend on your income level, the fact you participate in a 401(k), and your tax filing status. Let's hit the highlights:
You can make a pre-tax contribution through payroll of up to $17,500 in 2014 to your 401(k) if you're under age 50. If you're age 50+, you're eligible for an additional catch-up contribution of $5,500 for a total of $23,000.
If you are under age 50, you can contribute up to $5,500 in 2014 (assumes you have earned income) to a Traditional IRA, a Roth IRA, or some combination. For age 50+, add a $1,000 catch-up contribution for a total of $6,500.
Now, here's where the tax and eligibility considerations get a bit trickier . . . .
Since you participate in a 401(k), for 2014 the deductibility of a contribution to your Traditional IRA will phase-out between $60,000-$70,000 of Modified Adjusted Gross Income (MAGI) if you file single, or between $96,000-$116,000 for married filing jointly.
If your income is too high for a deductible contribution to a Traditional IRA, you may be able to make a non-deductible contribution to a Roth IRA. Eligibility to contribute to a Roth IRA in 2014 phases-out between $114,000-$129,000 of MAGI for a single filer, and $181,000-$191,000 for married filing jointly.
And if your income is too high for either a deductible contribution to a Traditional IRA or a non-deductible contribution to a Roth IRA, then you may wish to consider a non-deductible contribution to a Traditional IRA. Such a contribution may then be converted to a Roth IRA using the so-called "back door" strategy. But if this is the road you take, be sure you're fully aware of the timing and pro-rata concerns and that the transaction is handled properly.