Apr 13

Is there a downside to owning many IRA’s? Can I have a mixture of Roth and standard IRA’s? Is it permissible to have, say, 2 standard IRA’s and 3 Roth IRA’s each in different investments?


2 comments so far...

  • Faye H Said on April 13th, 2010 at 5:23 pm:

    You can have multiple IRA’s. The only thing that is limited is the total amount you can contribute each year.

    The maximum contribution for the 2006 tax year for age 49 and below is $4000. (Age 50 and above, it’s $5000)

    You cannot put $4000. into a standard IRA and another $4000. into a Roth.

    You could put $2000 into a standard and $2000 into a Roth though.

    One more thing. You cannot put $1000 in this year and then next year put in $7000 because you didn’t make the maximum contribution for the 2006 tax year.

  • lizzgeorge Said on April 13th, 2010 at 5:32 pm:

    You can have as many IRAs as you want, but you can only contribute $4,000 (this year) to your IRAs–so if you have 4 IRAs, you can only put $1000 in each of them this year.

    It sounds like you are confused about what an IRA is though. There is no reason to have many different IRAs because you can have multiple investments within one IRA. The downside to that is that you have too many accounts to juggle and your asset allocation is bound to be out of whack since it’ll be difficult to keep track of with dozens of investments in 7 different accounts. You’ll doubtless be overlapping–like buying two different funds that really are investing in the same stocks and industries.

    Just open an IRA at an investment firm that offers the funds/investments that you want. Vanguard is a great one with lots of different low cost mutual and index funds to choose from. Or you can buy individual stocks and ETFs in it. You can put 100 different investments in one IRA if you want to.

    If you really want to have a regular one in addition to a Roth, then you can open one standard and one Roth to have both types of tax shelters available to you. But in that case you still don’t need more than two.

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