401k, IRA and Roth IRA

Yes.

But the 5500 contribution limit applies to both the Roth and IRA combined.

And generally speaking, it's not in your best interest to contribute to both simultaneously.

One can invest in all three, yes. But the total contributed to the Roth and traditional IRA combined cannot exceed a certain amount. Last year that was $5000. Most people pick either the Roth or the traditional and not both.

The 401(k) is unrelated to the IRA (Roth or traditional), you can do either or both.

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And generally speaking, it's not in your best interest to contribute to both simultaneously.

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Why?

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Why?

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Because one is best used when you expect taxes to be higher in retirement than now, and the other the opposite.

There is a benefit in tax diversification, but it's best attained at different times.

So typically Roth is better early career, traditional later.

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what are the reasons to pick a roth over a traditional ira?

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Because the roth grows tax free and distributions aren't taxed.

Let's say you have $1 million to live on in retirement. You pull $50000 /year off to live on. If you pull from a roth, you get all of that $50K tax free., with a traditional, you pay taxes on the $50K.

is the limit $5,000 or $5,500?

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so the decision between a roth and ira is basically whether you think taxes will be lower or higher by the time you retire?

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That's a way of looking at it. But I do both, and I recommend doing both. I recommend the Roth first because it has other advantages such as being able to withdraw contributions before retirement without penalty.

Oh ok so the Roth account itself has a max before you have to withdraw as well as a Mac contribution to it per year