I Have a Retirement Plan at Work. Can I Also Have a Self Directed IRA?
The simple answer, yes. However, if we dig a little deeper, we will find that there are limitations on contributions and deductions.
There are two questions we need to address:
1. I have a retirement plan (401k, 403b, 457, TSP) at work. Can I also own a Self Directed IRA?
YES! Whether it is a start up account, an IRA you’ve had for a while, or an inherited IRA you received from someone else. In any case, YES, you may have more than one tax-preferred retirement account at the same time.
2. I have a retirement plan at work. Can I also contribute to a Self Directed IRA?
YES! Please be aware of the limitations set by the IRS.
If You Are Already Covered by a Retirement Plan at Work
| Plan Type | 2020 Limit |
| IRA |
$6,000 Over 50 Additional Catch-Up: $1,000 |
| 401(k) |
$19,500 Over 50 Additional Catch-Up: $6,500 |
| 403(b) |
$19,500 Over 50 Additional Catch-Up: $6,500 |
| 457 |
$19,500 Over 50 Additional Catch-Up: $6,500 |
Claiming a tax deduction for your IRA contributions
Your traditional IRA contributions may be tax-deductible. The deduction may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds certain levels.
| Filing Status | Modified AGI | Deduction |
| single or head of household | $65,000 or less | a full deduction up to the amount of your contribution limit |
| more than $65,000 but less than $75,000 | a partial deduction | |
|
$75,000 or more |
no deduction | |
| married filing jointly or qualifying widow(er) | $104,000 or less | a full deduction up to the amount of your contribution limit |
| more than $104,000 but less than $124,000 | a partial deduction | |
| $124,000 or more | no deduction | |
| married filing separately | less than $10,000 | a partial deduction |
| $10,000 or more | no deduction |
If you are married and file a joint income tax return or you are a qualifying widow(er).
- You may contribute to your IRA up to the maximum allowable limit if your AGI is $103,000 or less.
- You may contribute to your IRA a reduced amount if your AGI is over $103,000, but less than $123,000.
- You may not contribute to your IRA if your AGI is over $123,000.
If you are filing your income taxes as single or head of household.
- You may contribute to your IRA up to the maximum allowable limit if your AGI is $64,000 or less.
- You may contribute to your IRA a reduced amount if your AGI is over $64,000, but less than $74,000.
- You may not contribute to your IRA if your AGI is over $74,000.
For information about the Self Directed IRA or Solo 401k, call IRA Club at 312-795-0988
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