Short answer: Yes, you can contribute to both a 401(k) and an IRA, but if your income exceeds the IRS limits, you might lose out on one of the tax benefits of the traditional IRA.

How it works: One of the benefits of a traditional IRA is that you can get a tax deduction for your contributions each year. If you contribute, say, $6,000 to a traditional IRA this year, you can claim that contribution on your tax return and reduce your taxable income by that amount. (In fact, 401(k)s offer a very similar tax break: Your 401(k) contributions reduce your taxable income.)

But there’s a big caveat: If you have a 401(k) or another retirement plan at work, or your spouse does, then your contribution to a traditional IRA may not be deductible. People who have a retirement plan at work need to look at the IRA income limits to see if they qualify to deduct their contribution to a traditional IRA. In some cases, you may be able to deduct a portion of your contribution.