can you have more than one ira account

When you’re building a nest egg for your future, you might wonder about the best way to structure your retirement savings. Perhaps you’re considering different investment strategies or want to keep certain assets separate. This naturally leads to a common question for many savers: can you have more than one ira account?

So, Can You Have More Than One IRA Account?

The short and simple answer is yes, you absolutely can. The Internal Revenue Service (IRS) does not limit the number of Individual Retirement Arrangements (IRAs) you can open. You are free to have multiple traditional IRAs, multiple Roth IRAs, or a mix of both types. This flexibility allows you to tailor your retirement strategy to your specific financial goals and preferences.

Why Would You Consider Multiple IRAs?

While having a single, consolidated IRA is simpler, there are a few scenarios where holding multiple accounts makes sense. Some investors like to separate their aggressive growth investments from their more conservative, stable holdings to track performance more easily. Others might use one IRA for stocks and another for real estate investments. You might also have an old 401(k) from a previous employer that you’ve rolled over into a new IRA, while still contributing to a separate, primary account.

Navigating the Contribution Limits

This is the most critical part to remember. Even though you can have multiple IRAs, the annual contribution limit is a single, combined total across all of them. For 2024, the total you can contribute to all your IRAs is $7,000 (or $8,000 if you’re age 50 or older). This limit applies to the sum of your contributions to all traditional and Roth IRAs. You cannot contribute $7,000 to one and another $7,000 to a second. Keeping a close eye on this total is essential to avoid costly tax penalties.

Simplifying Your Investment Strategy

Before opening several accounts, consider if the benefits outweigh the added complexity. Managing multiple IRAs means more statements to review, different logins to remember, and a broader picture to keep in mind for your asset allocation. For many people, a single IRA with a diversified mix of investments is the most straightforward path. The best choice depends on your comfort level with managing your portfolio and your specific investment needs.

In the end, having multiple IRAs is a perfectly legal and sometimes strategic move. It offers flexibility for sophisticated investors but requires careful attention to the overall contribution rules. By understanding how these accounts work together, you can make an informed decision that best supports your long-term retirement vision.