Can You Open Multiple IRA Accounts?

An individual can own and contribute to more than one Individual Retirement Arrangement (IRA), including multiple Traditional IRAs, Roth IRAs, or a combination of both. These accounts can be held at various financial institutions. While there is no limit on the number of IRA accounts one can open, the Internal Revenue Service (IRS) imposes regulations that govern them collectively. The primary rule involves the total amount of money that can be contributed across all accounts in a single tax year, and understanding this limit is necessary to avoid tax penalties.

The Overall IRA Contribution Limit

The main rule for multiple IRAs is the single, aggregate contribution limit. This is the maximum total amount you can contribute across all your Traditional and Roth IRAs for a tax year. For 2024 and 2025, the total contribution limit is $7,000 for individuals under age 50. This is a per-person limit, not a per-account limit, that applies to the sum of all contributions.

You can split contributions any way you choose, as long as the total does not exceed the annual maximum. For example, you could contribute $7,000 to one IRA or put $3,500 into a Traditional IRA and $3,500 into a Roth IRA.

The IRS also provides a catch-up contribution for those age 50 or older, allowing an additional $1,000 for 2024 and 2025. This brings their total potential contribution to $8,000. Exceeding these limits results in a 6% excise tax on the excess amount for each year it remains in the account.

Rules for Combining Traditional and Roth IRAs

Specific eligibility rules determine if you can contribute to a particular type of IRA. These rules are based on your Modified Adjusted Gross Income (MAGI) and access to a workplace retirement plan, and they function independently of the aggregate contribution cap. Your income could restrict which type of IRA you are allowed to fund, even if you are under the total contribution limit.

Eligibility to contribute directly to a Roth IRA is subject to MAGI phase-out ranges. For the 2025 tax year, a single filer’s ability to contribute is phased out for incomes between $150,000 and $165,000, and they cannot contribute if their MAGI is $165,000 or more. For those married filing jointly, the phase-out occurs between a MAGI of $236,000 and $246,000.

The rules for deducting Traditional IRA contributions are also tied to income and coverage by a retirement plan at work. If you are not covered by a workplace plan, you can deduct your full Traditional IRA contribution regardless of income. If you are covered, your ability to deduct contributions is phased out based on your MAGI. For 2025, a single filer covered by a workplace plan will see their deduction phased out with a MAGI between $79,000 and $89,000.

Strategic Considerations for Multiple IRAs

Holding multiple IRAs can be part of a retirement savings strategy. A primary reason is tax diversification. Contributing to both a pre-tax Traditional IRA and a post-tax Roth IRA creates flexibility in retirement, allowing you to draw funds from different tax-treated pools to manage your taxable income.

Another use is asset segregation for rollover funds. When you leave an employer, you might roll your 401(k) balance into a Rollover IRA. Keeping these funds separate from your annual contributory IRAs maintains a clear record of the money’s source and may preserve certain creditor protections.

Savers also open multiple IRAs to diversify their investment providers. Different institutions have different strengths; one may offer a better platform for stock trading, while another provides access to certain mutual funds. Using multiple IRAs lets you align specific investment goals with the best-suited provider.

Managing Contributions and Distributions Across Accounts

When consolidating accounts, you can use a direct trustee-to-trustee transfer, where funds move from one financial institution directly to another. This method is generally preferred as it is not a taxable event, has no tax withholding, and can be done an unlimited number of times. An alternative is a 60-day rollover, where you receive a check that you must deposit into another IRA within 60 days; this method is limited by the IRS to one per 12-month period across all of your IRAs.

For Required Minimum Distributions (RMDs) from Traditional IRAs, you must calculate the RMD amount for each account separately. This calculation is based on the account’s fair market value at the end of the previous year and your life expectancy factor from the IRS Uniform Lifetime Table. After calculating the RMD for each IRA, you can aggregate the total amount and withdraw it from any single Traditional IRA or any combination of them.

An important consideration for Roth conversions is the pro-rata rule. This rule applies if you have a mix of pre-tax (deductible) and after-tax (non-deductible) funds in any of your Traditional, SEP, or SIMPLE IRAs. The IRS views all your non-Roth IRAs as a single entity for conversion purposes. When you convert funds to a Roth, the converted amount will consist of a proportional mix of your pre-tax and after-tax dollars, making a portion of the conversion taxable. You cannot choose to convert only the after-tax basis.