Maxing Out Retirement Contributions

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Maxing Out Retirement Contributions

You can stash the maximum amount each year in both your IRA and your 401(k) plan.

I can’t find any information on the total that I can contribute to a 401(k) and an IRA. Can I contribute the maximum to both of these plans? What happens the year that I turn 50?

SEE ALSO: 2013 Retirement Account Contribution Limits

Yes, you can max out both your 401(k) and your IRA in the same year, which is a great way to boost your savings.

In 2013, you can contribute up to $17,500 to a 401(k) and up to $5,500 to an IRA. And you can make catch-up contributions to both plans starting in the year you turn age 50 -- an extra $5,500 in your 401(k) and an extra $1,000 in your IRA, bringing the total to $23,000 for your 401(k) and $6,500 for your IRA.

For more information, see our 401(k) special report and Smart Ways to Boost Your 401(k). For retirement-saving strategies after age 50, see How to Retire Rich: 6 Smart Steps at Ages 50-66.

Got a question? Ask Kim at askkim@kiplinger.com.