Can You Have More Than One Roth IRA?

A Roth Individual Retirement Account (IRA) can be an attractive investment when planning your future. That's because contributions put into a Roth IRA can be withdrawn tax-free when reaching retirement age. Like other retirement accounts, you can have more than one Roth IRA, but there are some restrictions.

The Roth IRA

The Roth IRA was created in 1998 and has different rules than other IRAs such as the Simple IRA or the traditional IRA. Contributions to a Roth IRA are not tax-deductible. You can contribute to a Roth IRA regardless of your age as long as you have earned income. It can also produce income for specified heirs after your death.

Can I Have More Than One Roth IRA?

As far as the IRS is concerned, you can have as many Roth IRA accounts as you want, but it is still going to treat them as one. According to Motley Fool, the IRS originally advised brokers and mutual fund companies to tell clients to open different accounts for different types of contributions. Investors would have one account for Roth IRAs that were converted from other IRAs, one for new contributions, and even one for each year you contributed because the rules were different for each transaction. The rules have now been streamlined so multiple accounts aren't necessary.

Restrictions

Because the IRS treats all your Roth IRA accounts as one, your contributions must fall under the annual limits. In 2010, the contribution limit to a Roth IRA is $5,000 per year, or $6,000 if you are over the age of 50. Check with the IRS to see the most recent limits.

References

• IRS.gov: Roth IRAs
• Fool.com: How many Roth IRAs do you need?
• Roth IRAs at Wells Fargo Advisors