How Many Roth IRAs Can You Have?

A Roth Individual Retirement Account (IRA) serves as a popular retirement savings vehicle, offering distinct tax advantages. Contributions to a Roth IRA are made with after-tax dollars, meaning these funds have already been subject to income tax. A significant benefit of this structure is that qualified withdrawals in retirement, including both contributions and earnings, are entirely tax-free.

The Number of Roth IRA Accounts

Individuals can establish and hold multiple Roth IRA accounts, as there is no Internal Revenue Service (IRS) limit on the number of accounts a person can own. This flexibility allows individuals to open accounts with different financial institutions or even multiple accounts with the same provider.

While the number of accounts is unlimited, the annual contribution limit applies to the total amount contributed across all Roth IRA accounts combined. For example, if an individual has two Roth IRAs, the sum of contributions to both accounts in a given year cannot exceed the established annual maximum. Some individuals choose to have multiple Roth IRAs for various reasons, such as diversifying investments across different platforms, taking advantage of unique investment options offered by various providers, or managing different investment strategies. Historical financial events, like rollovers from other retirement plans, might also result in an individual holding multiple Roth IRA accounts over time.

Roth IRA Contribution Limits

Financial regulations impose annual limits on contributions to Roth IRAs, encompassing all accounts an individual holds. The maximum amount an individual can contribute depends on their age. For the 2025 tax year, individuals under 50 years old can contribute up to $7,000. Those age 50 or older are eligible for an additional catch-up contribution of $1,000, bringing their total maximum for 2025 to $8,000. These dollar limits apply to all contributions made to Roth IRAs and any traditional IRAs.

Eligibility to contribute to a Roth IRA is also determined by one’s Modified Adjusted Gross Income (MAGI), which introduces income limitations. For single filers or heads of household in 2025, the ability to make a full Roth IRA contribution phases out if their MAGI is between $150,000 and $165,000. They are ineligible to contribute if their MAGI is $165,000 or more.

For married couples filing jointly, the full contribution amount is available if their MAGI is less than $236,000, with a phase-out range between $236,000 and $246,000. They cannot contribute if their MAGI is $246,000 or greater. Married individuals filing separately face a very narrow phase-out range between $0 and $10,000.

Handling Excess Contributions

Contributing more than the allowed amount to a Roth IRA, known as an excess contribution, triggers specific consequences and requires corrective action. An individual who overcontributes is subject to a 6% excise tax on the excess amount for each year it remains in the account. This penalty is assessed annually until the excess funds are removed.

To avoid or mitigate these penalties, several methods are available for correcting an excess contribution. One common approach involves withdrawing the excess amount along with any earnings attributable to that excess. This withdrawal must be completed by the tax filing deadline for the year of the contribution, including any extensions, to fully avoid the 6% excise tax. Any earnings removed must be reported as taxable income in the year the original contribution was made.

Another method is recharacterization, which allows a contribution made to a Roth IRA to be treated as if it were originally made to a traditional IRA. This is often used when an individual exceeds the Roth IRA income limits. The recharacterization, including any associated earnings, must be completed by the extended due date of the tax return for the contribution year. Alternatively, an individual can choose to apply the excess contribution towards the following year’s contribution limit, though this option still incurs the 6% penalty for the initial year of the excess.