October 11, 2022

If you are like most people, you want to grow your retirement savings as much as possible. The key to doing that is to open a Roth IRA. A Roth IRA gives you the option to invest money before taxes and withdraw it tax-free in retirement. Simply put, it is one of the best ways to save for the future. As a result, many investors have multiple Roth IRAs. So, if you are wondering, “How many Roth IRAs can I have,” this article is for you. 

What is a Roth IRA?

A Roth IRA is a retirement savings account that allows you to contribute money on an after-tax basis. You can make contributions at any time, and those contributions grow tax-free until they are withdrawn. Roth IRAs are available to anyone who has earned income, including self-employed individuals and those who are unemployed or retired.

You can contribute up to $6,000 per year ($7,000 if you are 50 or older) and there is no minimum age requirement for contributing.

Withdrawals from a Roth IRA are tax-free as long as you have had the account for at least five years and are 59½ years old or older when you withdraw the money (or if you become disabled). If you withdraw before either of these things happens, your withdrawal will be subject to ordinary income tax rates on your earnings.

Difference Between a Roth IRA and a Traditional IRA

The difference between a Roth IRA and a Traditional IRA is that one is tax-free and the other is tax-deferred.

A Traditional IRA is funded with pre-tax money, which means that you pay taxes on the money that you put into it later. A Roth IRA is funded with after-tax money, so you don’t pay taxes on the money you put into it now.

A Traditional IRA can be withdrawn at any time without being taxed if you are older than 59½ years old. If you withdraw before then, you will pay a 10% penalty as well as income taxes on the withdrawal amount. You can also make an early withdrawal if you have had a financial hardship or took out funds to buy your first house or cover medical expenses exceeding 7.5% of your adjusted gross income (AGI).

A Roth IRA can only be withdrawn after five years have passed since opening it, but there is no penalty for doing so before then—you just pay regular income tax rates on whatever amount you withdraw. If you make withdrawals before 59½ years old, there is no penalty but there are still taxes due on any earnings from interest earned over time in the account.

Can You Have More Than One Roth IRA?

Yes, you can have multiple Roth IRA accounts. In fact, there are no restrictions or limits on how many Roth IRAs you can open or contribute to.

However, when it comes to tax benefits, you should be careful. The contribution limit is the same across all of your Roth IRAs—$6,000 per year ($7,000 if you are 50 or older). But if you contribute more than this amount to a single account, that could be considered an excess contribution and subject to penalties and taxes.

 The Benefits of Having Multiple IRAs

There are many benefits to having more than one IRA account. Here are just a few:

Save For Different Purposes

One of the biggest advantages of having multiple Roth IRAs is the ability to use them to save for different purposes. One can be used as a retirement account, while another could be used to save for a down payment on your first home or pay off student loans. It is also possible to use one Roth IRA as an emergency fund and another as a college savings account.

Take Advantage of Tax-Free Investment Growth

A major benefit of having multiple Roth IRAs is that you can invest in different types of assets without worrying about tax implications. For example, if one account is invested in municipal bonds, it might make sense to put another Roth IRA into a stock mutual fund. As long as each account has its own set of investments, there won’t be any tax consequences for moving money between accounts or changing the investments inside them.

Transfer Money Between Accounts

You can easily transfer money between accounts. If one account loses value or doesn’t meet your expectations, you can move money into another account without incurring any taxes or penalties on the original amount that was withdrawn from that account. You also can invest new money into any of your Roth IRAs without worrying about which one it goes into first.

Reduce Your Taxable Income

Using multiple Roth IRAs can help reduce your taxable income. You can put all of your earnings from each account into different investments so that they will be taxed at different rates. For example, if one account has high-risk investments like stocks while another has low-risk investments like bonds, then when you sell those investments over time, you will only pay taxes on the gains from the riskier account (or accounts). The more conservative accounts will continue to grow tax-free until you decide to withdraw them later on in life when they won’t affect your tax bill as much as they would now.

Diversify Your Portfolio

The more Roth IRAs you have, the more diversified your retirement portfolio. Having multiple accounts means that if one investment does poorly, it won’t affect the others as much. You will be able to take advantage of different tax rates and shelters for different accounts, which can help you reduce taxes on your retirement savings.

Simplify Estate Planning

When you have only one Roth IRA, you will have to make choices about who inherits the account. However, if you have several Roth IRAs, it is easier to leave them all to different beneficiaries. This can be useful for avoiding probate or for creating a less complicated estate plan.

Flexibility on Withdrawals

Having multiple Roth IRAs offers some flexibility when it comes time to withdraw money. If you have money in both a Roth IRA and a traditional IRA, you can choose which one to withdraw from first. When you take money out of a traditional IRA, you will owe taxes on the amount withdrawn—even if it was already taxed when you made Roth IRA contributions. You can avoid this by withdrawing from your Roth IRA instead—you won’t have to pay taxes again because all contributions were made with after-tax dollars.

The Drawbacks of Multiple IRAs

Multiple IRAs are great for saving for retirement because they offer the opportunity to invest in a variety of different assets. However, there are some cons to having multiple Roth IRAs. Here are some of the common drawbacks:

More Paperwork

Keeping track of multiple Roth IRAs means keeping track of more than one set of investments and account balances—not an easy task when they are spread across different investment platforms and brokerages. It also means dealing with more tax paperwork at tax time because it is hard to know exactly how much money is in which account without reviewing all the paperwork associated with each one individually.


You also have to be careful about how your money moves between accounts, especially if you don’t do it right. If you take withdrawals from a traditional IRA and move them into a Roth IRA —something called a conversion—the IRS will consider that money taxable income in the year you make the conversion. That can be a big hit on your taxes if you have already maxed out your 401(k) contributions and made some other pre-tax contributions that year.

Additional Fees

The other drawback is that you will pay more in annual fees. Most mutual fund companies charge a fee for each account they manage, so if you have multiple accounts with different managers, you will end up paying a lot more in fees than if you just had one account with one company.

How to Decide the Right Number of IRA Accounts 

If you are a fan of IRAs, you may be wondering how to decide the right number of Roth IRA accounts for your needs.

The short answer is: It depends. 

The number of Roth IRA accounts you hold is a personal decision. If you are just starting out with your retirement savings, it makes sense to open multiple accounts. That way, you can allocate money toward each goal separately.

However, once you have finished that task and have several years’ worth of savings in your Roth IRAs, it might make sense to consolidate all your accounts into one account or two. You will be able to take advantage of additional features and benefits from most brokerages if your assets are all in one place.

The best practice is to create an account for each specific goal: saving for retirement, saving for a car down payment, or paying off student loans. This way, it is easy to see how much progress has been made on each goal without having to do any math.

The amount of Roth IRA accounts you want is one of the most important financial decisions you can make, and it is not as simple as “just pick one.” In fact, you may want to consider opening multiple different types of Roth IRAs depending on your goals.

What Are the Rules Regarding Multiple IRAs?

If you are wondering about the rules regarding multiple Roth IRAs, here is what you need to know:

  • You can have more than one Roth IRA as long as they are set up with different trustees and custodians. In fact, a married couple could open separate Roth IRAs at the same financial institution, or they could open a joint Roth IRA at one bank and an individual Roth IRA at another bank.
  • You may also have more than one traditional IRA and one Roth IRA, but the total amount for both types of accounts combined cannot exceed $6,000 ($7,000 if you are age 50 or older). You cannot deduct contributions to a Roth IRA if you also contribute to a traditional IRA.
  • You must use a different account number for each IRA. The IRS requires all IRAs be identified by separate account numbers so it can distinguish between them when processing contributions and distributions. If you don’t assign a new number to each account, the IRS will do it for you when they process your tax return. This may result in some confusion over which contributions go where if someone else is helping manage your finances (such as an accountant or financial advisor). To avoid this problem, always use different account numbers for any additional IRAs that you open after filing taxes for the first one(s).
  • You can only contribute money that has been taxed in the current year. You can’t make contributions in one calendar year and then transfer them into a different account during the next calendar year—even if both accounts have the same financial institution. The IRS considers it improper conversion of assets between accounts and will disallow any earnings or gains from contributions that were made in this way.
  • You can have both traditional IRAs and Roth IRAs, but you can’t have both in the same account at the same time. If you want to convert money from a traditional IRA to a Roth IRA, you must first withdraw it from your traditional IRA, then convert it to a Roth.

Roth IRAs are a definite asset when it comes to retirement planning and having multiple accounts can give you some flexibility to take advantage of investment opportunities.

Final Thoughts On Having Multiple IRAs

The Roth IRA is a powerful savings vehicle that can help many people save for retirement. While the government imposes an annual contribution limit on these accounts, it does not restrict the number of accounts. So, you can actually have as many Roth IRAs as you want.

No matter how many, if you have a Roth IRA, you are already on the right track to saving for the future. Just keep contributing and let compound interest do its thing. You won’t regret it!

For more helpful investment ideas, Explore more financial resources and tools within the website.

About the Author Tiffany Aliche

Tiffany “The Budgetnista” Aliche, is an award-winning teacher of financial education, America’s favorite, personal financial educator, and author of the New York Times Bestselling book, Get Good with Money. The Budgetnista is also an Amazon #1 bestselling author of The One Week Budget and the Live Richer Challenge series and most recently, a children's book, Happy Birthday Mali More.

Follow me

Share your thoughts

Your email address will not be published. Required fields are marked

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}