Roth IRA: Can You Have More Than One Roth IRA?

Roth IRA account is an alternative to a Traditional IRA account.

Can You Have More Than One Roth IRA?

Can you have more than one Roth IRA? This is one of the questions that pops up in people's mind concerning Roth IRA since the rules and regulations about retirement accounts can be so confusing. Therefore, leaving most people with the question as to the number of Roth IRA they can have.

However, before we delve fully in the main topic of this blog post, "can you have more than one Roth IRA?" , Let's also take a succinct look at the meaning of Roth IRA. We can later discuss in the potential benefits of having more than one Roth IRA.

What is a Roth IRA?

Roth IRA account is an alternative to a Traditional IRA account. It was introduced in the 90s and the basic difference between a Traditional IRA and a Roth IRA is the way the contributions are taxed.

Below are some of the differences between a Roth IRA account and a Traditional IRA account:

Contributions in traditional IRA and pre-tax. This is because you are allowed to pay no taxes on your retirement savings until your distributions are taken from your funds by you. After retirement, the withdrawals you now make from the account will be taxed as income.

However, going with a Roth IRA account, you pay taxes on your income just before contributing into your IRA. But, immediately you start withdrawing funds from the account, you are not allowed to pay taxes on the subsequent withdrawals you make. Noteworthy, this applies as long as you are 59 and a half years hold— and you've had the account for more than 5 years.

There is bound to be more preference amongst investors to pay taxes up-fronts in order to avoid income taxes later with a Roth IRA. They tend to compare the benefits and consult the required expert before making further planning for their own retirement.

This is also advisable if you intend going through similar lane!

Now, into the main topic of the blog post, can you have more than one Roth IRA?

Can You Have More than One Roth IRA?

Of course, you can have more than one Roth IRA, and this, you can have at any time. There's practically no limitations in place when it comes to how how many Roth IRA you can have. 

However, it's important to note than your total contributions cannot exceed the legal limits set by the government despite the eligibility to have more than one Roth IRA.

To be more practical about this, for instance: 

 if you are under 50 in 2022, you can only contribute $6,000 per year to a Roth IRA. You can choose to contribute all of it to a single account or divide it between two or more accounts, as long as the total contribution does not exceed $6,000

But then, why would anyone consider having more than one Roth IRA account? 

Why Would a Person Want More than One Roth IRAs?

Despite the fact there are both pros and cons to having more than one Roth IRA account, here are some of the reasons a person might consider going on with such idea:

• They intend to save for different purposes
• They intend to increase their insurance protection
• It allows easy, and quick way of dividing and disbursing inheritance and other assets
• It helps to diversify retirement investments

How Can IRAR Help You with More than One Roth IRA?

Opening more than one Roth IRA is not the right choice for every investor and for every retirement strategy. When deciding how best to manage your retirement savings and plan for your long-term goals, it is best to talk with a tax professional.

IRAR offers free consultations to help you understand more about the different types of strategies and retirement accounts. Diversifying your IRA with alternative assets is one of the most important investments you will make in your life, so schedule a free consultation today.