After you've fully funded your 401(k), invest as much as you can in an IRA.
What's great about a Traditional IRA:
You can deduct your contribution on your tax return (if you qualify).
You don't owe taxes on your investments until you withdraw the money.
You can invest in almost anything.
As long as you have earned income.
For a deduction if you're not covered by a retirement plan at work or...
You're covered by a plan but your modified adjusted gross income (AGI) is $52,000 or less ($83,000 for married couples filing jointly). You get a partial deduction if it's less than $62,000 ($103,000 for married couples).
You're not covered by a plan but your spouse is and your modified AGI is $156,000 or less. You get a partial deduction if it's less than $166,000.
What's great about a Roth IRA:
It's one of the only true tax-free investments: You can withdraw your earnings without tax or penalty as long as you're over 59 1/2 and the Roth is at least five years old.
While you can't deduct your contributions, you can withdraw them at any time tax- and penalty-free.
You don't have to begin making withdrawals at age 70 1/2.
You're eligible if...
You have earned income and your modified AGI is below $99,000 for single filers ($114,000 for a partial contribution), $156,000 for joint filers ($166,000 for partial).