How much can I contribute to a Traditional IRA in 2024?

The 2024 IRA contribution limit is $7,000 ($8,000 if age 50 or older). Deductibility phases out for those covered by a workplace retirement plan at higher incomes: single filers phase out at $77,000–$87,000, MFJ at $123,000–$143,000.

How do 401(k) contributions reduce my taxes?

Traditional 401(k) contributions are made pre-tax, reducing your taxable income dollar-for-dollar. If you contribute $10,000 and are in the 22% bracket, you save $2,200 in federal income tax that year. The 2024 limit is $23,000 ($30,500 if age 50+).

Can I contribute to both a 401(k) and an IRA?

Yes, you can contribute to both in the same year, subject to each account's limits. Combined contributions maximize your tax-deferred savings space and reduce your current-year tax burden.

💎IRA & 401(k) Tax Savings Calculator

Calculate your federal tax savings from Traditional IRA and 401(k) contributions

Gross Annual Income ($)

Traditional 401(k) Contribution ($)

Traditional IRA Contribution ($)

Filing Status

Age

Maximize Tax Savings with Retirement Contributions

Traditional 401(k) and IRA contributions reduce your taxable income dollar-for-dollar, giving you an immediate tax break while building long-term retirement savings. The 2024 401(k) limit is $23,000 ($30,500 if 50+) and the IRA limit is $7,000 ($8,000 if 50+). Contributing the maximum to both can reduce taxable income by up to $30,000 — saving roughly $6,600 in federal taxes at the 22% bracket.

Traditional IRA deductibility phases out at higher incomes if you or your spouse are covered by a workplace retirement plan ($77,000–$87,000 for single, $123,000–$143,000 for MFJ in 2024). Above these limits, Roth IRA or backdoor Roth contributions may be better alternatives — though they don't offer an upfront tax deduction.

This calculator estimates federal income tax savings only. State income taxes (0–13.3%) may provide additional savings. Consult a tax professional for personalized advice, especially regarding IRA deductibility phase-outs and Roth conversion strategies.

Frequently Asked Questions

Is a Traditional IRA or Roth IRA better for tax savings?

A Traditional IRA saves taxes now (deduction today, taxable in retirement). A Roth IRA saves taxes later (no deduction now, tax-free in retirement). If you expect to be in a lower tax bracket in retirement, Traditional is usually better. If you expect the same or higher bracket, Roth wins.

Does my employer's 401(k) match count toward the limit?

No. The $23,000 employee contribution limit is separate from employer matching. Total combined contributions (employee + employer) are capped at $69,000 in 2024.

Maximize Tax Savings with Retirement Contributions

Frequently Asked Questions

Related Tools