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Are the $18,000 401(k) 2017 limit and the $5,500 IRA limit mutually exclusive for a combined limit of $23,500 (under 50)?

Or are they inclusive, meaning $5,500 in an IRA, would limit a 401(k) to $12,500?

I'm also assuming employee matching count towards these limits. Is this correct?

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They are mutually exclusive. Provided you meet the income limits you can contribute to both. Employer match do not count toward the 18K.

On the other hand traditional IRA and Roth IRA are inclusive. So if single and making having a MAGI under 118K, you could do the 18K of your own money into a 401(k), and $5,500 into a Roth.

You can put in $23,500 of your own money with the employer match on top of that.

  • I am confused by the terms "mutually exclusive" both here and in the Question. To me, "mutually exclusive" options are those where picking one option excludes the other. But we are saying here that you can choose both the 401(k) and the IRA, which I would say makes them not mutually exclusive. – Ben Miller Apr 19 '17 at 3:18
  • @BenMiller I think maybe "independent" or "separate" would be a better word choice in this case; there is one limit for employee contributions to workplace plans, and another limit for IRA contributions, and contributing to one does not affect the limit on the other. – yoozer8 Jun 16 at 13:33
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Are the $18,000 401k 2017 limit and the $5,500 IRA limit mutually exclusive for a combined limit of $23,500 (under 49)?

Yes, but the amount that you can deduct from a traditional IRA depends on your gross income and marital status - See publication 590-A for details. Also note that the limit applies to your combined traditional and Roth IRA contributions (meaning you can't contribute $5,500 to both; just a total of $5,500 between the two).

I'm also assuming employee match $ count towards these limits - is this correct

No - the limit for combined contributions between you and your employer is $54,000 in 2017. So if you contribute $18,000 your employer can only contribute $36,000.

  • "Your employer can contribute as much as they like." I believe it is still limited by the $54k limit. – user102008 Apr 18 '17 at 19:26

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