Maxing Out a 401(k) and IRA: Rules, Limits, and Tax Benefits Explained

Money Girl

Macmillan Holdings, LLC

Investing, Education, Business, Entrepreneurship, How To

4.6 • 1.8K Ratings

🗓️ 31 January 2025

⏱️ 13 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Laura answers a listener's question about whether you can use multiple retirement accounts in the same year.

Transcript

Click on a timestamp to play from that location

0:00.0	Welcome back to Finance Friday. It's another special edition of Money Girl where I answer your
0:09.4	burning money questions. Today's topic comes from Bill, who says, I maxed out my traditional
0:15.4	401k by contributing $23,000 for 2024 and would like to invest more, but I'm unclear about the rules.
0:24.6	I'll have a bigger-than-normal-normal tax bill because I earned some extra income working a
0:29.0	side hustle last year. Can I also max out an IRA individual retirement account for more tax deductions?
0:39.9	This is a great question, Bill. I appreciate you sending it in and congratulations on maxing out your workplace retirement account. That's a huge
0:45.1	milestone and for earning extra income to boot. This podcast will review the rules for using
0:51.0	multiple retirement accounts in the same year and maximizing potential tax
0:55.5	breaks, whether you have a little or a lot of income. Thanks, everyone, for downloading episode
1:01.0	897 of the Money Girl podcast. I'm Laura Adams, an award-winning author, money speaker, on-camera
1:08.5	spokesperson, and founder of the Money Stack, my free Substack newsletter.
1:13.6	You can learn more and connect with me at laura d.adams.com.
1:17.9	That's where you can email your money question and sign up for the Money Stack,
1:22.2	which gives subscribers a terrific money success toolkit. That's what you get for free just for signing up. You can also
1:29.8	record a brief question or comment on our voicemail line by calling 302-364-0308. All right, let's talk about
1:39.8	the benefits of using multiple retirement accounts. You know, I think investing through retirement accounts
1:46.4	is probably one of the best and easiest tax shelters, which means that they reduce your current
1:53.2	or future tax liability. Growing your account balance and cutting taxes simultaneously is a
2:00.3	really powerful combination that can help you build
2:03.6	wealth. And that's the primary reason why I always recommend making tax-advantaged accounts,
2:10.1	like retirement accounts, your go-to for investing. In addition, you can use multiple
2:16.2	retirement accounts in the same year. However, how much you can
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from Macmillan Holdings, LLC, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of Macmillan Holdings, LLC and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.