Can I Have More Than One IRA Account?

Yes, you can have more than one Individual Retirement Arrangement (IRA), as there is no legal restriction on the number of accounts an individual can open. This allows you to hold accounts at different financial institutions or to own multiple IRAs of the same type, such as two separate Traditional IRAs. You can also own different types of IRAs simultaneously.

While opening multiple accounts is permitted, it is governed by a specific set of Internal Revenue Service (IRS) regulations. These rules do not limit the quantity of your accounts but instead regulate how much you can contribute across all of them combined for tax purposes.

Understanding the Aggregate IRA Contribution Limit

The annual contribution limit applies to the total amount of money you can add across all your Traditional and Roth IRAs combined. For 2025, this aggregate limit is $7,000 for individuals under age 50. This single limit must be shared across every personal IRA you own, not applied to each one individually. For example, if you have two Roth IRAs, you could contribute $3,500 to the first account and $3,500 to the second, or $1,000 to one and $6,000 to the other.

Individuals age 50 and over are permitted to make an additional “catch-up” contribution. For 2025, this extra amount is $1,000, bringing their total possible contribution to $8,000 per year. This catch-up provision is also part of the single, aggregate limit.

Exceeding this combined limit results in a 6% excise tax on the excess contributions for each year they remain in the account. This tax is reported using IRS Form 5329. To avoid this penalty, you must withdraw the excess contribution and any earnings it generated by the tax filing deadline for the year the contribution was made.

Holding Different Types of IRA Accounts

You are permitted to own and contribute to different types of IRAs concurrently, which can be a strategic way to manage your retirement savings. The two primary types of personal IRAs are the Traditional IRA and the Roth IRA. Contributions to a Traditional IRA may be tax-deductible, and the investments grow tax-deferred until you take distributions in retirement, at which point they are taxed as ordinary income.

A Roth IRA operates differently, as contributions are made with after-tax dollars and are never deductible. The benefit is that qualified distributions in retirement, including all the investment earnings, are completely tax-free. You can hold both a Traditional and a Roth IRA, and the single annual contribution limit can be split between them.

Beyond personal IRAs, some individuals may have access to employer-sponsored plans like a SEP IRA or a SIMPLE IRA. A SEP (Simplified Employee Pension) IRA is for self-employed individuals or small business owners, while a SIMPLE (Savings Incentive Match Plan for Employees) IRA is for small businesses. These accounts have their own, much higher contribution limits that are entirely separate from the personal IRA limits, which allows business owners and self-employed workers to save for retirement on two different tracks simultaneously.

Key Rules for Managing Multiple IRAs

Managing funds across several IRA accounts involves specific rules, particularly concerning retirement distributions and conversions.

Once you reach the mandated age, you must begin taking annual Required Minimum Distributions (RMDs) from your tax-deferred retirement accounts, including Traditional, SEP, and SIMPLE IRAs. The starting age for RMDs is 73 for individuals born from 1951 through 1959. For those born in 1960 or later, this age increases to 75.

When you have multiple of these IRA types, you must calculate the RMD amount for each account separately based on its year-end value. However, the IRS aggregation rule allows you to add up the calculated RMDs from all your Traditional, SEP, and SIMPLE IRAs and withdraw that total amount from just one of the accounts, or any combination of them. Roth IRAs do not have RMDs for the original account owner.

Another rule is the pro-rata rule, which applies when you perform a Roth conversion and hold both pre-tax and after-tax money in your non-Roth IRAs. The IRS views all your Traditional, SEP, and SIMPLE IRAs as a single pool of money for this purpose. You cannot simply convert only the after-tax funds to a Roth IRA tax-free. Instead, any conversion is treated as a proportional distribution of your pre-tax and after-tax balances. For example, if your total IRA balance is $100,000, with $90,000 in pre-tax funds and $10,000 in after-tax funds, any amount you convert will be considered 90% taxable. This calculation is performed using IRS Form 8606.

Funds moved from an employer plan like a 401(k) into an IRA through a rollover do not count toward your annual contribution limit.