As you travel to your investment destination, you may have asked yourself, “Can I have multiple IRAs?” An IRA could be the right vehicle for your retirement savings goals. However, there are several different kinds available. As you explore the options, you might be wondering how many IRAs you can have.

In this article we will discuss different types of IRA options and answer questions such as “Can I have more than one IRA?” and if so “How many IRAs can I have?”

What is an IRA?

First and foremost, what is an IRA? An IRA, or an individual retirement account, provides a vehicle for building one’s retirement funds in a tax-advantaged way. Different IRAs offer a variety of different tax benefits, but these accounts are all designed to meet different needs.

You can not take funds out of your IRA without paying a penalty until you are 59.5 years old. If you withdraw the funds early, you will have to pay a 10% penalty on top of your income taxes.

There are many ways not to pay the penalty for withdrawing funds for specific circumstances. For example, first-time homebuyers can withdraw up to $10,000 from their IRA without an early distribution penalty.

Here is a breakdown of the various types of individual retirement accounts.

Traditional IRA

A traditional IRA lets savers make tax-deductible contributions. The funds you contribute go directly to pre-tax income.

As you build your savings nest egg, this tax benefit will allow you to grow your nest egg faster without taxation being a major burden. However, you’ll have to pay taxes on withdrawals.

Roth IRA

Roth IRAs are another popular option. Contributions to this IRA are not tax deductible. However, qualified charity distributions will not be taxed as income. For that reason, a Roth IRA is a wise choice if you want to avoid the burden of having to pay taxes on the front end.

Other IRAs

Although the conventional and Roth IRAs are some of the more popular choices, there are other IRAs specifically designed for self-employed individuals.

The SEP-IRA lets you contribute up to 25% of your income. But the maximum amount you can contribute is $61,000 for 2022.

Also, the SIMPLE IRA (Savings Incentive Match Plan for Employees) enables small businesses to contribute to their own and their employees’ retirement savings.

If you are self-employed, I recommend reading our entire article about self-employed retirement accounts.

How many IRAs can you have?

As you can see, there are many different IRAs to choose from.

Ultimately, there is no limit to the number of accounts you can have open. However, there is a cap on how much you can contribute to all your IRAs every year.

So you can respond to your question of “Can I have multiple IRAs?” with a resounding “Yes.” However, you must keep track of your contributions to each IRA carefully.

IRA contribution limits

If you invest in multiple IRAs, the total amount you can contribute each year to both accounts can’t exceed the annual limit of $6,000 ($7,000 if 50 or older). The IRS may penalize you with a penalty of 6% for exceeding this amount.

The contribution limits change every year. The current limit of $6,000 is in effect for 2022. But you will need to frequently check the contribution limits for IRAs each year so you don’t go over the limit.

So, you may have a traditional and Roth individual retirement account. But you can contribute a total of only $6,000 in 2022. Can you have more than one Roth IRA? Yes, but the combined maximum contribution in 2022 is $6,000.

How Many IRAs Can You Have

Reasons to have more than one IRA

Since we covered the question “How many IRAs can you have?” we now want to delve into the reasons having multiple IRAs is beneficial. Having several IRAs has a number of important benefits.

Tax diversification

Declaring IRAs in different accounts leads to a varied tax strategy. Instead of putting all your eggs in one tax basket, you could make pretax contributions and post-tax contributions.

When you make withdrawals, you’ll have different tax obligations with each type of account.

Flexibility for withdrawals

With various types of IRAs, you have varying withdrawal rules as you near retirement age. Having the flexibility of these rules can make your retirement savings work for you better as you approach retirement age.

For instance, a Roth IRA will permit you to withdraw your contribution penalty-free at any time. But that’s typically not the case with an IRA unless you meet specific criteria.

Reasons to stick with one IRA

Instead of asking yourself, “How many IRA accounts can I have?” Maybe the question should be, “What is the right number of IRAs for my situation?”

Here are several reasons that make a single IRA the best one.

Extra paperwork

Setting up an IRA requires the filling out of paperwork. Although the process may take a little longer than usual to complete, it must be done properly to avoid any errors.

No one likes the idea of adding more documents to their to-do list.

Layers of complexity

Beyond the initial documentation, you must keep track of your contributions to numerous IRAs on an annual basis. If, however, you make an error by contributing more than you should, the IRS will charge you a 6% tax on the excess amount.

This will require constant monitoring of your contributions across various accounts. With additional complexity, keeping up with it will become increasingly difficult.

How many IRAs should you have?

When asking “How many IRA accounts can I have?”, it is best to reword the question as “How many IRAs should I have?” In theory, you can register for as many IRA accounts as you like. But in practice, not having enough time to properly manage more than one account may not be the best use of your time.

In most cases, it is best to keep things simple by sticking with a single IRA. Every retirement plan has its own specific details. As you design your retirement budget, consider which mixture of savings accounts will work best for your unique situation.


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