Yes you can, you retirement saving machine. And with all the career shifts that people regularly go through in their lives, it’s likely you’ll have accumulated a veritable alphabet soup of different accounts by the time you retire.
There are absolutely no laws that would prevent you from contributing to both a 401(k) and an individual IRA, but there is one important thing you should keep in mind. 401(k)s, being employer-administered retirement accounts, often feature one major perk you won’t find in any traditional IRAs — free money. Employers often kick in a percentage of whatever the employee contributes to his or her 401(k)s. And since 401(k)s feature a relatively high contribution ceiling — as of 2018, employees are permitted to contribute $18,500 — it might well be that this will represent your entire retirement contribution for the year. So if your employer is matching your contributions up to the maximum, you should absolutely take full advantage of that before contributing to a traditional IRA.
That said, IRAs have one huge advantage over 401(k)s — you’ll be able to decide exactly how to invest your money while employer-sponsored 401(k)s generally offer only a few investment choices. Once you leave an employer, you’d do well to rollover your 401(k) into a traditional IRA at which point you’ll be able to make all decisions about how your money is invested. Often you’ll have no choice in the matter, since employers will often like to bid adieu not only to you, but your 401(k) as well.