How Many Retirement Accounts Can You Have?

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Retirement Accounts
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 employer-sponsored 401(k) plan would affect her eligibility for those accounts. The answer is yes, you can have…

How many retirement accounts can you have? Earlier this week a reader asked me this same question, and I promised a response.

How many retirement acounts can you have? You can have a bunch but watch out for the tax limits.The specific question regarded owning both Traditional and Roth IRAs, and whether or not having an employer-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?

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 $6,000 ($7,000 if you are over 50). There can also be steep fees to pay for withdrawing from your Roth IRA too early, learn more about Roth IRA withdrawal rules here.

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. Just like with the IRAs you cannot exceed the maximum contribution for your employer-sponsored accounts across all accounts.  This means you want to be careful not to 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 at the new employer.

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.

What Happens when I have an Employer-sponsored plan and an IRA?

When you are investing in both employer-sponsored and individual retirement account the tax system treats them as two different buckets of money.  So you can put the maximum amount toward your employer-sponsored accounts and the maximum amount toward your personal IRAs without running into any tax man problems.  Just like I mentioned above, make sure you are not going over your limits on any accounts that are part of the same bucket of money.  If you do, you will lose the tax benefit on whatever you put in over the contribution limit.

How Much Could You Put into Retirement Accounts

While you may not fit perfectly into this scenario, I want to give you some details on maxing out multiple accounts and getting as much as you can into your retirement savings.

For this scenario, we are going to use a person that has a regular job where the employer offers a 401(k), a Roth IRA, and a small business on the side that they use to contribute to a SEP IRA.

As of 2019, you can contribute $6,000 to your IRA/Roth IRA, $19,000 to a 401(k), and up to $55,000 in a SEP IRA or 25% of income (whichever is smaller).

We know that personal accounts and employer accounts are treated as separate buckets, but plans from different employers are also treated separately. That means if you had the income in your side business to support it, you could max out all three of these accounts and save $80,000 a year for retirement.

Pros and Cons of Multiple Retirement Accounts

Fewer accounts are 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.

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.

Where to Open Retirement Accounts

There are many brokerages that allow you to open a variety of retirement accounts. Some of the top options available are:

Many people also choose to manage their accounts with well-known fund brokerages and investment companies such as Vanguard, Fidelity, T. Rowe Price.

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.

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About Ryan Guina

Ryan Guina is the founder and editor of Cash Money Life. He is a writer, small business owner, and entrepreneur. He served over 6 years on active duty in the USAF and is a current member of the IL Air National Guard.

Ryan started Cash Money Life in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about military money topics and military and veterans benefits at The Military Wallet.

Ryan uses Personal Capital to track and manage his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free account here.

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  1. Ryan says

    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. 😉

  2. deepali says

    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. 🙂

  3. Jarhead says

    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.

  4. Pinyo says

    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.

    • Michael12 says

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

      Thanks for the help.

    • Donnie says

      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)

  5. Dividends4Life says

    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

  6. diane mcgill says

    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?

  7. Ryan says

    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.

  8. mark says

    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.

  9. Ryan says

    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.

  10. Philip O says

    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?

  11. Ryan says

    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.

  12. Jason says

    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.

    • Ryan says

      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.

    • Ryan says

      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.

  13. Luke says

    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

  14. Sandi says

    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?

  15. Madmaxx says

    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?

    • Ryan says

      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.

  16. Alan says

    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.

  17. Jim Fritz says

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

  18. Laura Stainback says

    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?

  19. Michael says

    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.

  20. David says

    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.

  21. JWP says

    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

    • Ryan says

      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.

    • Ryan Guina says

      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).

  22. Lance says

    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?

  23. MaryAnn says

    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).

    • Ryan Guina says

      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!

  24. Ben says

    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.

    • Ryan Guina says

      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.

  25. Dennis Piechowicz says

    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.

    • Ryan Guina says

      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.

  26. szm says

    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

    • Ryan Guina says

      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.

  27. Ramona says

    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?

    • Ryan Guina says

      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!

  28. leo says

    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.

    • Ryan Guina says

      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.

  29. Grant says

    It’s better to have multiple income streams and diversify your portfolio, so looking into both types of IRAs is a smart decision. Thanks for this information.

  30. Dwayne Weiser says

    Thank you for offering such an extensive article on this topic. I think this is a subject of interest for most young professionals. I think that, although it’s more difficult to manage, multiple retirement plans are a good choice. This way you have more security and stability. Of course, they can be “helped” using classic saving accounts. Personally, I believe that what we do right now will affect our well-being down the line.

  31. Alex says

    Great info, if you have a moment can you clarify something for me please.

    From what I gather, you can have a 401k, a Roth and a Traditional and max each one out per year (given you “rich” enough to do so)?

    • Ryan Guina says

      Hello Alex, you can have both a 401k and an IRA in the same year. They have separate rules and contribution limits. The Roth and Traditional IRA share the same contribution limit ($5,500 in 2018). So you can have both a Roth IRA and a Traditional IRA in the same year, but you can’t put $5,500 into each of them. The $5,500 contribution limit is shared between the two accounts. So you can do $3,000 in one and $2,500 in the other, $2,750 in each, or any combination that adds up to $5,500. Just keep in mind the IRS has additional rules for who is eligible for each account, based on your income. So it’s good to read up on those rules to make sure you are maximizing your retirement accounts.

  32. Paul Mitchell says

    I rolled over my 401k into an ira account, my financial advisor put part of the funds into an annuity and part into REITs. The question is because the annuity and the REITs have different account number but was funded with the same 401k rollover is this one ira with multi-account or two iras?

    • Ryan Guina says

      Hi Paul, It’s not possible to tell from the information provided. But it is possible to have one IRA with multiple funds inside it, with each respective fund having its own account number. You will need to speak with your financial advisor and ask for more information. You should also request access to your account statements and information so you can track your investments on your own. Good luck!

  33. Jeff says

    I need to invest about 23K per year starting now, if I open several Roth, IRA accounts is the limit of 7K for each or all together in a calendar year.

    • Ryan Guina says

      Jeff, you can only invest a maximum of $6,000 per year into all IRA accounts (plus a $1,000 catch-up contribution for a total of $7,000 if you are age 50 or older). This limit applies to all IRAs on an annual basis. So you can’t open several IRAs and max them out each year. There are other ways to invest, however, including an employer-sponsored retirement plan such as a 401(k), Thrift Savings Plan, etc. You can also invest in a taxable brokerage account. The latter doesn’t give you the same tax advantages as retirement accounts, but you gain in flexibility. Best wishes!

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