How Many IRAs Can You Have?

There is no limit on the number of IRAs you can have. You can even own multiples of the same kind of IRA, meaning you can have multiple Roth IRAs, SEP IRAs and traditional IRAs.

That said, increasing your number of IRAs doesn’t necessarily increase the amount you can contribute annually.

For Roth IRAs and traditional IRAs, that contribution limit is $7,000 in 2024 and 2025 ($8,000 if age 50 and older). You’re free to split that money between IRA types in any given year, but the total can't exceed the limit.

Contribution limits don't apply if you’re transferring money from a former employer’s retirement plan, such as a 401(k), into an IRA.

» Interested in a Roth IRA but don’t qualify? A backdoor Roth IRA might help.

5 benefits of multiple IRAs

Having multiple IRAs can help you fine-tune your tax-minimization strategy, as well as access more investment choices and increased account insurance. Here are the pros of having multiple IRAs:

Tax diversification

Different types of IRAs provide different tax breaks. A traditional IRA gives you an immediate tax deduction, allowing you to postpone what you owe the IRS until you start withdrawing your savings from the account in retirement. With a Roth IRA, there’s no upfront tax break on contributions, but qualified withdrawals are completely tax-free. Here’s a deep dive into how traditional IRAs and Roth IRAs differ.

» Learn more: The ins and out of tax-efficient investing.

Investment diversification

Having IRAs at multiple financial firms can give you exposure to different types of investments and even different investing strategies. For example, let’s say you want the bulk of your retirement savings managed professionally, but you also want to use a portion to dabble in individual stocks on your own. You could set up one IRA at a robo-advisor (for low-cost, automated portfolio management) and another IRA at a brokerage that provides stock trading — or two separate accounts at the same firm if it offers both services.

» MORE: See our roundup of the best IRA providers.

Flexibility on withdrawals

In addition to the differences in how your savings are taxed, traditional and Roth IRAs have different rules about withdrawals both before and during retirement. Roth IRA contributions (not earnings) can be withdrawn tax- and penalty-free at any time and for any reason. Traditional IRAs have less leeway, although they do allow early withdrawals (before age 59 ½) without penalty in certain circumstances. And withdrawals from a traditional IRA become mandatory after age 73. There are no required minimum withdrawals with the Roth.

More insurance coverage for your cash and investments

In the unlikely event the brokerage or bank that holds your IRA fails, SIPC and FDIC insurance on investment and deposit accounts can cover your losses. Coverage is generally capped at $500,000 (SIPC) and $250,000 (FDIC) for a single account holder at a single institution, but there are ways to increase your coverage through multiple accounts.

For example, if you have two Roth IRAs at the same SIPC-insured institution, you qualify for only $500,000 in coverage. But if you have a Roth and traditional IRA at the same institution, both accounts are considered separately insured entities with $500,000 SIPC coverage for each.

Simplified estate planning

Naming beneficiaries is part of the process of opening an IRA. While you can name more than one beneficiary per IRA (a primary and contingency), having different people named on separate accounts can mitigate beneficiary arguments after you die.

» Learn more: A 7-step checklist for estate planning.

3 drawbacks of multiple IRAs

The main drawback of multiple IRAs? The hassle factor. Here are some of the cons:

More paperwork

Although it’s easier than ever to track and manage your money online, multiple accounts mean dealing with multiple tax forms, notices of service changes or updates, privacy policies and other disclosures.

More complicated retirement planning and portfolio maintenance

Asset allocation, or the art of finding the right balance between risk and reward in your portfolio, is a key part of retirement planning. When your assets are spread across multiple retirement accounts, monitoring performance and rebalancing the overall mix to maintain a coherent investment strategy can take more work.

Added exposure to account and investment fees

It’s natural to pay the most attention to higher-balance accounts and let the smaller ones ride. But neglecting care and maintenance on any retirement savings account can lead to subpar investment returns, especially when it comes to investment fees — including brokerage fees and mutual fund sales loads — that erode your earning power over time.

» Need some help? Check out our full roundup of the best financial advisors.

What’s the right number of IRAs?

For some people, the number is at least two: a Roth IRA and a traditional IRA. Both would be in addition to a workplace retirement plan, such as a 401(k). Here's why:

• The Roth IRA provides the most flexibility both before retirement (tax- and penalty-free withdrawals of contributions) and in retirement (tax-free distributions and no required minimum withdrawals). If you qualify to contribute to a Roth IRA, it’s well worth having one. Here are the current Roth income limits.

• A traditional IRA is a smart choice for money from old workplace retirement plans or if the upfront tax deduction incentivizes you to save more. You’ll probably get access to more investment options and more control over fees compared with your old 401(k). Plus, rolling the money from a plan funded by your pretax dollars into a traditional IRA, which treats taxes the same way, ensures no surprise tax bills from the IRS.