How Many Retirement Accounts Can You Have?

by Ryan Guina

How many retirement accounts can you have? Earlier this week a reader asked me this same question, and I promised a response. The specific question regarded owning both Traditional and Roth IRAs, and whether or not having an employee sponsored 401(k) plan would affect her eligibility for those accounts. The answer is yes, you can have both types of IRAs, and no, your 401(k) plan doesn’t affect your eligibility to contribute to an IRA. Here are some more detailed answers:

Can You Have Both a Roth and Traditional IRA?

How many retirement accounts can you have?

You can have multiple retirement accounts.

Yes. You can own both a Roth and Traditional IRA, and you can contribute to both in the same tax year. The important thing to remember is that you cannot contribute more than the maximum contribution limit across all IRA accounts in any given tax year. (More information comparing Roth vs Traditional IRAs). Depending on your income level, the max IRA contribution limit is $5,500 ($6,500 if you are over 50).

Can You Have More than one IRA?

Yes, you can open multiple IRA accounts and they can be held with multiple companies. Again, remember not to contribute more than the contribution limit across all IRA accounts in a given tax year. You can also have one IRA account with multiple investments within the account. This makes it easier to diversify your retirement holdings and maintain easier control over your account administration. Here are tips for maximizing your IRA contributions each year.

Can You Have More than one 401(k) Account?

Yes. A 401(k) plan is an employer sponsored retirement plan. When you leave your job, you have to make decisions regarding your old 401(k) plan. You will need to decide whether to leave the assets in place (if allowed by your former plan’s rules), roll over the assets into an IRA, roll the assets into a new 401(k) plan, withdraw the assets in a lump sum, or transfer the assets into a qualified annuity. For more detailed information, read about your options for your 401(k) when leaving your job. Note: Don’t exceed the max 401k contribution limits if you change jobs within a calendar year! Be sure to take previous contributions into account when setting your deferred contribution.

What About other Retirement Plans?

There are many other retirement plans out there including SEP-IRAs, SIMPLE IRAs, solo 401(k) plans, annuities, and more. As a general rule of thumb, you can have multiple accounts for these as well. Keep in mind there may be eligibility, contribution, and income requirements associated with these types of accounts, so you should do a little more research before opening new accounts. Here is a little help to get you started: comparing 401(k) plans and IRAs.

Pros and Cons of Multiple Retirement Accounts

Fewer accounts is usually easier to manage. For most people, consolidating retirement accounts is the best plan because it is easier to manage asset allocation, fees, withdrawals, taxes, paperwork, account questions, and transferring assets to beneficiaries. Many people choose to manage their accounts with a well known fund companies such as Vanguard, Fidelity, T. Rowe Price, or with discount brokers such as TD Ameritrade, E*Trade, or TradeKing.

There can be advantages of owning multiple retirement accounts, however. A good example of this would be if you had a 401(k) plan that had investment funds or low management fees that you couldn’t match elsewhere. If your current investment is better than what you can get somewhere else, there is no need to consolidate it just to reduce a small amount of paperwork.

My Current Retirement Accounts

I currently have a Roth IRA (with several different funds in it), two 401(k) plans, and an account with the Thrift Savings Plan (TSP) (government version of a 401(k)). I could roll my old 401(k) plan into my new one, but I haven’t decided whether or not to do that yet. I can also roll over my TSP account into a 401(k) plan or IRA, but there is a special provision that allows military members who receive tax free combat pay to contribute tax free funds to their TSP account. TSP contributions are normally pre-tax contributions and are taxed upon withdrawal, but the portion of the contributions I made while in a tax free zone can be withdrawn tax free as well. I would lose the tax free withdrawals if I transferred my TSP funds into a different account.

Note: Please keep in mind, this is general information. There may be other factors that affect how much you can contribute or which accounts you may be eligible for. Some of these factors include income level, type of employment, employer sponsored retirement plans and more.


Published or updated November 19, 2012.
Print or e-mail this article:

{ 52 comments… read them below or add one }

1 Ryan

Would you please add a section about over contributing to an account during a fiscal year.

Reply

2 Ryan

Ryan,

That’s a great idea, but I think it would flow better if I wrote that in a separate article.

Reply

3 Ryan

deepali, you’ve got quite a few retirement plans! You might consider consolidating a few of them if the fees aren’t too much. It’s easier keeping track of everything when it is under one roof. ;)

Reply

4 deepali

Good sum. I have 2 403bs, 1 401k, 2 Roth IRAs, and 2 Trad IRA. Actually, I think there is another Roth and another Trad somewhere. :)

Reply

5 Jarhead

I have the just the TSP now, but once I can get out from under this pile of debt I racked up I am going to start a Roth.

Reply

6 Pinyo

This is a good informative post. I just want to add that your contribution could be limited by how much you make. For instance, my parents can only contribute to Roth IRA, but not traditional.

Reply

7 Michael12

What are the actual limits for this?? i am getting different numbers from different sites.

Thanks for the help.

Reply

8 Donnie

Pinyo, I think you have it backwards. There are no restrictions on a traditional, but a Roth is restricted to those making under $183000.(Those who file jointly)

Reply

9 Ryan

Good point, Pinyo. I’ll make sure that is in there. :)

Reply

10 tiffanie

thanks for helping me earlier this week, and for posting this! you clarified a lot for me :)

Reply

11 Dividends4Life

Great read! As Pinyo pointed out, all have limitations (earnings and contributions). If you are close, you need to understand where the edge is.

Best Wishes,
D4L

Reply

12 diane mcgill

my husband has a roth ira, a 40lK where he works full time. He also works at his own business and has a sep. My question is. Can he transfer this sep (in mutual fundsnow) to a brokerage firm and invest in the stock market, get in and out without paying taxes until retirement?

Reply

13 Ryan

Diane: As long as your husband’s SEP IRA remains in a SEP, he can change the allocation without paying taxes. HE would only have to pay taxes on it if he withdraws the funds.

Reply

14 mark

Regarding multiple retirement plans, can I contribute pre-tax contributions to a company sponsored SIMPLE and have the company fund 403b contributions at the same time? We are part of a 501c3 nonprofit organization.

Reply

15 Ryan

Mark: Thank you for contacting me. I know you can have these plans at the same time (for example if you have an account from a previous employer). However, I do not know whether or not you can contribute to both of these from the same employer in the same year, or what your contribution limits would be. I recommend contacting your plan administrator. I’m sorry I couldn’t be of more assistance.

Reply

16 Philip O

I am age 56. I have 2 different full-time employers. One has a simple IRA with match, and the other has a 401k offered with a match. My income, married, for the jobs combined is 250,000. How much will I be allowed to put in these accounts?

Reply

17 Ryan

Philip: I am fairly sure you can contribute to both accounts, but I am not certain how much you can contribute to them. I recommend contacting a CPA or speaking with your HR rep for more information.

Reply

18 Jason

After reading the article; I can have multiple IRA accounts, but if I 2 Trad IRA accounts can I contribute 5K in each or just 2,500 each for the max of 5K. I understand why the gov’t wouldnt want me to do this with a Roth but their going to get their tax’s in the end no matter what.

Reply

19 Kellie

What do you think about a gold backed IRA?

Reply

20 Ryan

Kellie: I can’t recommend any specific investments. I only recommend that people research which asset allocation they feel is the best for their needs and their risk tolerance. Best of luck.

Reply

21 Sandy

Can i deduct my contribution to an ira account in ny tax return if i have a 401k plan at work?

Reply

22 Ryan

You can deduct contributions to a Traditional IRA in addition to contributions to a 401k so long as you meet income requirements and don’t exceed contribution limits.

Source: http://www.irs.gov/publications/p590/ch01.html

Modified AGI limit for traditional IRA contributions increased. For 2008, if you were covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is:

  • More than $85,000 but less than $105,000 for a married couple filing a joint return or a qualifying widow(er),
  • More than $53,000 but less than $63,000 for a single individual or head of household, or
  • Less than $10,000 for a married individual filing a separate return.

For 2008, if you either lived with your spouse or file a joint return, and your spouse was covered by a retirement plan at work, but you were not, your deduction is phased out if your modified AGI is more than $159,000 but less than $169,000. If your modified AGI is $169,000 or more, you cannot take a deduction for contributions to a traditional IRA. See How Much Can You Deduct? in this chapter.

Reply

23 Luke

Concerning IRA accounts, am I correct in that I cannot contribute more than $5000 total per taxation year, spread across all of my IRA accounts?(I am less than 50 years of age) So to clarify, I cannot open two accounts and contribute $5000 to each of them in the same year, correct?

Thanks,
Luke

Reply

24 Ryan

That is correct, Luke. Also, Traditional and Roth IRAs have the same contribution limits and you can only contribute $5,000 to these accounts. So if you wanted you could contribute $2,500 to a Traditional IRA and $2,500 to a Roth IRA. Most people prefer to stick with one type of IRA though.

Here is more information to get you started:

Best of luck!

Reply

25 Sandi

I am 53 and retired from the Air Force a year ago. I make about $34,000 a year in retirement pay. May I contribute to an IRA using my retirement pay?

Reply

26 Madmaxx

Hello, I have a 401K a 459 plan ,pension,Roth IRA and mixed stocks and bonds. Would it be a good idea to keep my current 401K as it is and open a roth 401K and start contributing to that to save on the tax hit later on?

Reply

27 Ryan

Madmaxx, Each person has a different financial situation, and I cannot comment on the best course of action for you. I recommend speaking with a professional financial planner, who can help you understand the variety of investing and tax issues that your situation warrants.

Reply

28 Alan

What are the rules regarding 60-day rollovers with multiple accounts? Can I do a 60-day rollover on account A in January and Account B in March and Account C in May? If so, consolidation might not be such a hot idea. You could have 6 accounts and borrow on one of them at any time.

Reply

29 Ryan

Alan, I’m not sure.

Reply

30 Jim Fritz

Having a Roth IRA account and a seperate Roth 401K account, do the limits intertwine with each other or are they totaly seperate limits?

Reply

31 Ryan

Entirely separate, Jim.

Reply

32 Laura Stainback

I have an employer sponsored simple IRA with match that I am currently contributing the max limit (11.5K). Can I have a separate traditional or Roth account and contribute the full 5K?

Reply

33 Michael

I am confused about the amount you are allowed to earn as a salary/Commision and still contribute into a ROTH IRA or Trad IRA. I read that the threshold is 90k and then i read it was 105K and then 120K. Can someone please clear this up for me??? Whats the point that having this type of account is not productive. Would it just be better to max out my 401K? or do both???

I am currently in my early 30’s and don’t have much tax shelter. I wanted to contribute to an IRA so that i could lower my tax bracket.

AND if you make too much isn’t it just better to put the month into a investor acccount and buy lets say Mutual Funds.

I apologize in advance, i am pretty new to investing only been doing it for about 3 years. THANK YOU for the help in advance.

Reply

34 David

I have a question on the opening of a SEP..

Client opens a SEP IRA (S Corp – 2 owner operators) in 2010 – Original document indicates 1 year for employee eligibility.

Client hires another employee in 2010 – and is now not so happy with their current SEP Provider.

Client wants to open another SEP in 2011 with another Provider and Have a 3 year Eligibility requirement so that the owners can fund in 2011 (as they have been employed the 3 years necessary 2009, 2010 and 2011) and not have to fund for new employee in 2011 – They understand they will have to in 2012.

Question – Can this be done?

I have done some research and I am not clear on this – Any ideas? I appreciate your help.

Thanks.

Reply

35 Ryan

David, I recommend contacting a financial planner or small business advisor in this situation.

Reply

36 JWP

Question –

I own multiple LLCs and I am the owner and only employee. I would like to set up a SEP IRA for myself this year. I understand the total allowed is 25% or $49,000 and that is the max per person. However, let’s say Company A made $170,000 in profits. I can put in a maximum of $42,500 in the SEP IRA from that company.

Now, what do I need to do to put in another SEP IRA from another company to make up the $6,500 ? Example, my Company B made $150,000, putting in 25% from it would put me over the $49,000 limit per person. Do I just fill out another SEP IRA form and put down $6,500 from Company B?

That way Company A’s contibution is $42,500 and Company B’s contribution is $6,500 – making the total $49,000 for me. The max allowed per year.

I hope that makes sense. Since one company did not make over $200,000, I need to use multiple companies that I own to make sure I claim the full $49,000.

Thanks!
JWP

Reply

37 Ryan

JWP, to be honest, I’m not 100% certain. I recommend speaking with a tax professional if you use one to file your taxes, or speak with your IRA provider, as they may be able to help you better understand your options.

Reply

38 steve

What if you are working for 2 companies and have 2 401k plans? How would the cut work at $17,500?

Reply

39 Ryan Guina

Steve, the limit is $17,500 shared across both plans. You can split it up however you like. I recommend contributing the minimum to get an employer match for both companies (if available), then contributing the rest to the plan with the best investment options or the lowest expense ratios. The primary consideration is not to exceed the maximum contribution limit with your contributions. (the contributions from an employer match do not count toward your $17,500 limit).

Reply

40 Lance

I just turned 40 and I have zero in a retirement account. I own a business that makes $5,000 a month before taxes and expenses. After taxes, I make $3000 a month. How much should I be putting toward retirement and which type of fund should I be using?

Reply

41 MaryAnn

My husband and I own 2 companies. I work at both. We have a solo 401k at his and I contribute. Can I also set up a SEP from my company? Can we also (on top of this) have a Roth (income is in-line for deduction).

Reply

42 Ryan Guina

MaryAnn, you can have a Solo 401k and a SEP from more than one company, however, you need to be careful with regard to contribution limits. You also want to ensure these companies aren’t under the same formal corporation. I believe they need to be separate entities. Traditional and Roth IRAs are separate from 401k plans and SEP IRAs, so you can both have one of these as well, provided you meet income requirements. Because of your situation, you would be best served by visiting a tax professional or someone who specializes in setting up retirement plans. They will be able to help you set everything up to maximize your retirement savings and your tax benefits. Best of luck!

Reply

43 Ben

Can I have two active Solo 401k account, say one with Vanguard and one with Fidelity, as long I don’t over-contribute? I initially opened Vanguard but realized that they don’t accept rollovers from SEP-IRA, but Fidelity does, so now I want to open a SOLO 401K with Fidelity so I can rollover my SEP-IRA and do a backdoor ROTH IRA. Thank you.

Reply

44 Ryan Guina

Ben, to be honest, I don’t know if it is possible to have two active plans at any given time, even if you don’t contribute too much in any given year. I would contact the Vanguard or Fidelity customer service department and ask them to look it up for you. I have found both companies to offer excellent customer service and advice when it comes to similar questions.

Also, you may find it easier to consolidate those accounts at some point. It will make your book keeping easier and reduce compliance issues. For example, once you reach a certain amount of money in your account (total assets of $250,000 or greater), you have to file a Form 5500 EZ with the IRS. I don’t know how that works if you have multiple accounts, or if having multiple accounts will cause any red flags in terms of getting audited. So you may consider just rolling your Vanguard Solo 401k plan into your Fidelity plan. That may be the simplest way of handling the situation.

Reply

45 Dennis Piechowicz

I think I may misunderstand this so I need some clarification before I get into trouble. I am currently 60 years old. I continue to work and want to save as much as I can to multiple IRA’s.

Everywhere it says that you can have multiple IRA’s, Traditional, Roth 401 etc, and each has a limit depending on your age, but what I need to know is this. I have a Roth account setup with Etrade and a Roth account set up at Ameritrade. I contribute $125/week to both which will take me to the $6500 limit per year for each totaling $13,000. Can I have multiple ROTHS that I can contribute the maximum into of $6500 to each? These articles do not explain that exactly. In you article above you say ACROSS the IRAs, so I don’t know now if this is a problem for me. Thank you for your response.

Reply

46 Ryan Guina

Dennis, the way you explain it would be over-contributing, and would get you into trouble with the IRS. You can only contribute up to the annual maximum in any given year. The rule is per person, per year and applies to all IRAs. You cannot exceed the annual contribution limit regardless of whether you are contributing to a Traditional IRA, a Roth IRA, or both.

So your maximum contribution is $6,500, regardless of how many IRA accounts you have. If you have more than one account, you could contribute $3,500 in one, and $3,000 in another – or any other combination, so long as you don’t exceed the annual contribution limit.

401k accounts work the same way, however, they are separate from IRAs. The limit is per person, per year, regardless of whether or not you have access to more than one 401k account. I hope this helps.

Reply

47 szm

Hello Ryan,
I own a S corp and set up a solo K account. Now I want to open a new solo K account with another vendor and terminate the current solo K account.
My question: Do the retirement money saved at the current solo K account have to rollover into the new solo K account? or the money can be rollovered into other kind of retirement plan, like SEP-IRA?

Thanks,
SZM

Reply

48 Ryan Guina

SZM, I recommend speaking with a tax professional or investment advisor to fully understand your options regarding where you can rollover your funds, and to understand exactly how to do it, along with any potential tax implications. A tax professional or investment advisor will be able to look at your entire financial situation and tailor their advice to your specific situation. This will save you a lot of time and money in the long run.

Reply

49 Ramona

I have 4 retirement accounts. Two 401k and 2 tax sheltered annuity accounts. I’m 52 and need to stop working. Can I draw retirement on just one or two of them and leave the others for when I’m 62?

Reply

50 Ryan Guina

Ramona, You should be able to make withdrawals from them, but there may be tax implications or other concerns that you need to be aware of, including possible early withdrawal penalties. There may be ways around the early withdrawal penalties, but it would require the advice of a tax professional or a qualified investment advisor. I strongly recommend seeking professional advice from someone who can help you understand the full implications of dipping into your retirement accounts, and who can help you devise a plan to avoid the worst of the taxes or penalties. Best of luck!

Reply

51 leo

I have a 401k and 457 plan at work and would like to open an annuity IRA including my spouse who does not work. I am under 50 and would like to know what is the maximum I can deposit for 2014 and 2015 before 4/15.

Reply

52 Ryan Guina

Leo, you should be able to open a Spousal IRA for your wife, even if she doesn’t work. The maximum contribution limit for 2014 and 2015 is $5,500 per person in each year. So if your income limits support it, you could open an IRA for 2014 for yourself and one for your wife. The max you could contribute to the 2014 IRAs would be $11,000. You would be able to do the same for 2015. Just make sure you designate the contributions for 2014 or 2015 when you make them. And if you don’t have enough to cover the full $22,000, then contribute to the 2014 IRAs first. You have until April 15, 2016 to contribute to your 2015 IRAs. Here is more info on the IRA contribution limits, including earnings limitations and other information.

Reply

Leave a Comment

Previous post:

Next post:

.