How Many IRA Accounts Can I Have?

Individual Retirement Arrangements (IRAs) are a popular savings vehicle designed to help individuals accumulate funds for retirement with various tax advantages. While there is no explicit limit on the number of IRA accounts an individual can establish, understanding the distinct rules governing different IRA types, contribution limitations, and withdrawal protocols is important. These regulations guide how your savings grow and how they can be accessed in retirement.

Understanding Different IRA Types

Several types of IRAs exist, each with unique characteristics impacting how contributions are taxed and how withdrawals are treated in retirement. A Traditional IRA generally allows for tax-deductible contributions, leading to tax-deferred growth until withdrawals commence in retirement, at which point distributions are taxed as ordinary income. In contrast, a Roth IRA is funded with after-tax dollars; contributions are not tax-deductible, but qualified withdrawals in retirement are entirely tax-free. This tax-free growth and distribution feature makes it attractive for those expecting to be in a higher tax bracket later in life.

For self-employed individuals and small business owners, a Simplified Employee Pension (SEP) IRA offers a retirement plan where only the employer makes contributions into an IRA established for each employee. These plans feature higher contribution limits than Traditional or Roth IRAs. A Savings Incentive Match Plan for Employees (SIMPLE) IRA is another employer-sponsored plan for small businesses, blending aspects of a 401(k) and an IRA, often requiring mandatory employer contributions. These IRA types offer flexibility in retirement planning, catering to different financial situations and employment structures.

IRA Contribution Limits

While an individual can hold multiple IRA accounts, the Internal Revenue Service (IRS) imposes a combined annual contribution limit across all Traditional and Roth IRAs. For 2025, the maximum amount an individual can contribute to these accounts is $7,000. This limit applies regardless of how many Traditional or Roth accounts are maintained.

Individuals aged 50 and older are eligible to make additional “catch-up” contributions to their Traditional and Roth IRAs. In 2025, this catch-up contribution is $1,000, raising the total annual limit to $8,000 for those who qualify. These limits do not apply to SEP or SIMPLE IRAs, which are employer-funded plans with separate, higher limits. Roth IRA contributions are also subject to income limitations based on Modified Adjusted Gross Income (MAGI) and filing status, which can reduce or eliminate eligibility. For instance, in 2025, single filers with MAGI of $150,000 or more, or joint filers with MAGI of $236,000 or more, may face reduced or no Roth IRA contribution eligibility.

IRA Withdrawal Rules

The treatment of withdrawals from multiple IRA accounts depends on the type of IRA. For tax purposes, all Traditional IRAs, including SEP and SIMPLE IRAs, are aggregated and treated as a single account. When a distribution is taken from any Traditional IRA, the taxable portion is determined by considering the total value and total non-deductible contributions across all Traditional IRA accounts, a concept known as the pro-rata rule.

Roth IRA withdrawals follow specific ordering rules: contributions are withdrawn first, followed by converted amounts, and then earnings. Roth IRA contributions can always be withdrawn tax-free and penalty-free. Qualified distributions of earnings from a Roth IRA are tax-free and penalty-free if the account has been open for at least five years and the account holder is age 59½ or older, disabled, or using the funds for a first-time home purchase (up to $10,000). Multiple Roth IRAs do not alter these rules, as the IRS treats all of an individual’s Roth IRAs as one for distribution purposes. Generally, withdrawals from Traditional IRAs before age 59½ are subject to ordinary income tax and a 10% early withdrawal penalty, unless a specific exception applies.