Some people mistakenly believe they cannot contribute to their employer-sponsored retirement plan and to an IRA in the same year. In fact, you can contribute to both at the same time — for the 2014 tax year, you can contribute up to $17,500 (or $23,000 if you’re age 50 or older).
With an IRA, you can contribute up to $5,500 for the 2014 tax year, or a maximum of $6,500 if you’re age 50 or older. The only requirement is that you have earned income at least equal to the amount of your IRA contribution. If you can, invest the maximum to both your employer-sponsored retirement plan and an IRA to add fuel to your retirement savings program. Note that withdrawals prior to age 59½ are generally subject to a 10% IRS early withdrawal penalty in addition to ordinary income tax.