An IRA lets you contribute more and offers more flexibility in investment choices.

Do you contribute to an IRA? Only 28% of American workers do, according to a survey by LIMRA. The majority who don’t say they feel they can’t afford it. We would argue otherwise. Another 25% say they don’t contribute to an IRA because they participate in a retirement plan at work. That excuse doesn’t work either.

If you can afford to, you should contribute the maximum allowed to your workplace retirement plan. It’s convenient (contributions automatically come out of your paycheck), you pay less in taxes, you can contribute more than you can to an IRA and many employers match a portion (essentially, free money!). Add tax-deferred growth to the list and it’s clear why we give workplace retirement plans the gold star.

But that doesn’t mean you shouldn’t also be contributing to an IRA. For one thing, saving only in a workplace plan may not let you accumulate enough to meet your retirement income needs. You need to save still more — which an IRA lets you do. And IRAs offer you more flexibility in investment choices than your employer’s plan likely offers. You can contribute up to $6,000 this year in a traditional IRA — and $1,000 more if you’re age 50 or older. (Note: Tax deductibility depends on your household income. Talk to your tax advisor.)

To make your 401(k) and IRA work together, first contribute the maximum you’re permitted on a pre-tax basis to your 401(k). Then open an IRA and contribute the maximum there, too, on a pre-tax basis (i.e., until your income reaches the phaseout point where the IRA is no longer tax-deductible). Can you save even more after that? If you can, do so — in a taxable brokerage account that invests in a well-diversified portfolio.

Yes, that’s a lot of saving — and it requires discipline. But it’s worth it.

This material was prepared for informational and/or educational purposes only. Neither Financial Engines Advisors L.L.C (also referred to as Edelman Financial Engines) nor its affiliates offer tax or legal advice. Be sure to consult with a qualified tax or legal professional regarding the best options for your particular circumstances.