A listener recently wrote in with a common and important retirement planning question: If I'm already maxing out my 401(k), can I also contribute to a traditional IRA in the same year? The short answer is yes—but whether it makes sense, and how much benefit you receive, depends on your income, tax situation, and long-term goals.

In this episode, I break down how traditional IRA contributions work alongside employer-sponsored retirement plans, when those contributions are deductible, and what options are available if your income is too high for a deduction. We also explore alternative strategies, including Roth IRA contributions and backdoor Roth conversions, so you can decide how best to use your annual IRA "coupon."

This episode is especially helpful if you're trying to balance tax savings today with tax flexibility in retirement and want to avoid common mistakes that can complicate your plan later.

[00:00] Whether you can contribute to a 401(k) and IRA in the same tax year
[01:55] The tax-deferral benefits of contributing to a traditional IRA
[03:55] When a traditional IRA contribution is tax deductible
[05:00] Income limits that affect IRA deductions
[07:00] Using non-deductible IRA contributions correctly
[10:00] Roth IRA contribution limits and income phaseouts
[11:45] How a backdoor Roth IRA strategy works
[13:30] Choosing the right IRA strategy for your situation

Even if you are already maxing out your 401(k), contributing to a traditional IRA can provide additional tax advantages. The primary benefit is tax deferral. Dividends, interest, and capital gains generated inside an IRA are not taxed in the year they occur. Instead, taxes are deferred until you withdraw the money, potentially years or even decades later.

This can be especially powerful if you do not need the money right away. With required minimum distributions now starting at age 73—and increasing to age 75 for those born in 1960 or later—many investors have a long runway for tax-deferred growth.

Whether your traditional IRA contribution is deductible depends on two main factors: whether you or your spouse are covered by an employer-sponsored retirement plan, and your adjusted gross income (AGI). Coverage includes plans such as a 401(k), 403(b), 457, SIMPLE IRA, SEP IRA, or pension plan.

For 2026, married couples filing jointly can fully deduct a traditional IRA contribution if their AGI is below $129,000, with deductions phasing out completely by $149,000. For single filers, the full deduction applies below $81,000 and phases out by $91,000. If neither spouse is covered by a workplace plan, the contribution is fully deductible regardless of income.

If your income is too high to deduct a traditional IRA contribution, you still have options. One approach is making a non-deductible IRA contribution. While this does not provide a tax deduction upfront, your investments can still grow tax deferred. However, this strategy requires careful recordkeeping to properly track taxable and non-taxable portions when withdrawals begin.

Another option is contributing to a Roth IRA, if your income falls within Roth contribution limits. Roth IRAs offer tax-free growth and tax-free withdrawals, making them attractive for long-term planning. For those whose income exceeds Roth limits, a backdoor Roth IRA may be an option, provided there are no other pre-tax IRA balances that would trigger pro-rata taxation.

• Retirement Readiness Review
• Subscribe to the Retire with Ryan YouTube Channel
• Download my entire book for FREE

Connect With Morrissey Wealth Management

www.MorrisseyWealthManagement.com/contact

Subscribe to Retire With Ryan

Last week, we covered the best investments to preserve your money, but this week we are shifting gears to focus on growth. For retirees, the goal is to have an income that outpaces inflation, and historically, the best way to achieve that is by having 50% to 70% of your portfolio invested in stock funds.

In this episode, I break down five specific Exchange Traded Funds (ETFs) that can help you grow your wealth in 2026. I discuss why I prefer ETFs over mutual funds, specifically focusing on cost, transparency, and liquidity, and provide the exact ticker symbols and expense ratios for the funds I use with my own clients to build diversified, growth-oriented portfolios.

If you are willing to accept some volatility to achieve higher long-term returns, this episode provides a blueprint for structuring the equity side of your retirement plan.

• [00:00] Top 5 Growth ETFs to Own For 2026.
• [02:55] Why ETFs are superior to mutual funds.
• [05:23] The core holding: S&P 500 ETF.
• [09:28] Capturing extra growth with SPYG.
• [06:33] Small Cap stocks and the profitability factor.
• [13:38] Investing in the Developed World ex-US.
• [15:43] High growth potential in Emerging Markets.

Before diving into specific funds, it is important to understand why Exchange Traded Funds (ETFs) are often a better choice than traditional mutual funds. I prefer them for four main reasons:

• Cost: ETFs often have significantly lower expense ratios, some less than a tenth of a percent, compared to actively managed funds that can charge up to 2%.
• Performance: Many active funds struggle to outperform their benchmarks over time.
• Transparency: You can see exactly what an ETF holds, whereas mutual funds may only report holdings twice a year.
• Liquidity: You can trade ETFs throughout the day while the market is open, rather than waiting for the market close price required by mutual funds.

For the core of a growth portfolio, I look to the S&P 500, which has averaged a 15% return over the last five years.

• State Street SPDR Portfolio S&P 500 ETF (SPYM/SPSM): This fund tracks the S&P 500 but was created to offer a lower cost (0.02% expense ratio) compared to the original SPY ETF. It is a massive fund with over $100 billion in assets, heavily weighted toward large technology companies like Nvidia, Apple, and Microsoft.
• S&P 500 Growth ETF (SPYG): If you want to lean more aggressively into growth, this fund tracks S&P 500 companies with high sales growth and momentum. It has a 3-year average return of 29% and a very low expense ratio of 0.04%.

While the S&P 500 is dominant, it has had "lost decades" in the past where returns were negative. To diversify, I recommend the S&P 600 Small Cap ETF.

• Unlike the Russell 2000, the S&P 600 index requires companies to be profitable, which filters out lower-quality stocks.
• Although it has lagged recently, small caps may be poised for a comeback due to economic shifts and tariffs. The expense ratio for this fund is just 0.03%.

The US has outperformed international markets recently, but that trend could reverse.

• Developed World ex-US (SPDW): This fund invests in developed economies like Japan, the UK, and Canada. It offers exposure to major global players like Samsung and AstraZeneca with a low expense ratio of 0.03%.
• Emerging Markets (SPEM): For higher potential growth, this fund targets countries with rapidly growing GDPs, such as China, Taiwan, and India. These economies have a growing middle class, which can drive corporate earnings. The fund holds major companies like Taiwan Semiconductor and Alibaba.

• Retirement Readiness Review
• Subscribe to the Retire with Ryan YouTube Channel
• Download my entire book for FREE

www.MorrisseyWealthManagement.com/contact

Subscribe to Retire With Ryan