Can you have multiple traditional and Roth IRAs? What if you also contribute to a 401(k)?

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Your nest egg can have several baskets.

© Maksim Shchur/stock.adobe.com

Tax-advantaged retirement accounts can help you build wealth for the future and improve your chances of a comfortable retirement. That can make it tempting to open multiple IRAs, including Roth IRAs, which offer a strategy for tax-free retirement income.

But can you have multiple Roth IRAs in addition to other retirement accounts? The short answer is yes, but you must follow the rules and meet the eligibility requirements.

There’s no limit to the number of IRAs you can have. The same applies to 401(k) plans and other tax-advantaged retirement accounts. In fact, some workers collect multiple retirement accounts as they move from company to company and either keep the accounts with their old employer(s) or roll them into a separate IRA.

But having multiple accounts doesn’t mean you can contribute to all of them in the same year. Contribution limits apply to the total amount you can contribute in all accounts, not to each account individually.

People like the idea of multiple IRAs because they can take advantage of different tax situations. Traditional and Roth IRAs have different structures and different tax advantages.

Depending on your situation, a retirement investing strategy that involves both types of accounts can be beneficial. This is especially true if you meet the requirements for a Roth early in your career (when your income may be lower) and then shift to a traditional IRA as your income rises through your working years.

Because a Roth IRA is a type of IRA, it’s possible to have more than one. However, you must ensure you meet the eligibility requirements to contribute to a Roth IRA. For 2024, you can contribute the maximum amount to a Roth IRA if your modified adjusted gross income (MAGI) is less than $146,000 for single filers or $230,000 for those married and filing jointly. If your 2024 MAGI is $146,000 to $161,000 as a single filer or $230,000 to $240,000 if you’re married and filing jointly, your contribution limit will be reduced.

For 2025, you can contribute the maximum allowed to a Roth IRA if your MAGI is less than $150,000 for single filers or $237,000 for those married and filing jointly. Contributions phase out for single filers with incomes of $150,000 to $165,000 and for those married and filing jointly making $236,000 to $246,000.

If you meet the requirements, though, you could theoretically open as many IRAs as you’d like—traditional and/or Roth. These IRAs can also complement any 401(k) accounts you might hold through current and past employers.

If you can open multiple IRAs, including multiple Roth IRAs, what’s to keep you from opening a lot of IRAs and maxing them all out? The short answer: the rules.

The IRS places contribution limits on IRAs. The IRA contribution limit for 2024 and 2025 is $7,000. The IRS may increase that in future years, but each year you’re limited on how much you can put into an IRA. And limit applies to the total amount in all accounts, not to each account individually.

If you have five IRAs, including Roth accounts, you can only contribute a total of $7,000 to all the accounts in 2024 and 2025. You can divide that $7,000 however you want, but the total amount you put in all of your traditional and Roth IRAs can’t exceed the contribution limit.

This also applies to catch-up contributions. For those age 50 and older, it’s possible to make an additional contribution of $1,000 in 2024. That brings the cumulative total to $8,000 for some savers. But, again, that’s the total—you can’t make a catch-up contribution for each individual account.

Contributions to 401(k) plans are also subject to cumulative limits. Although you can have multiple 401(k)s, including a Roth 401(k), your total contributions to all accounts can’t exceed the annual limit. The rule applies even if you change jobs during the year. For 2024, the contribution limit is $23,000, with an additional $7,500 catch-up contribution for those age 50 and older. For 2025, the limit increases to $23,500, with the catch-up contribution remaining at $7,500.

One advantage of a Roth 401(k) is that there are no income limits on your ability to contribute. Suppose you don’t qualify for a Roth IRA, but your employer offers a Roth 401(k). In that case, you can contribute to the Roth 401(k) and still put money into a traditional IRA, depending on your income and if it works with your long-term retirement and tax strategy.

Depending on your income and whether or not your spouse also has a 401(k), you may max out both your 401(k) and IRA contributions in the same year. In other words, if you’re eligible (and can afford) to contribute $7,000 to your IRA and $23,000 to your 401(k) in 2024, you may do so. For 2025, the IRA contribution limit remains $7,000, while the 401(k) contribution limit increases to $23,500. But pay attention to the income and eligibility requirements:

If you want to reduce the complexity of your finances or change jobs and take your retirement account with you, it’s possible to roll the money from one account to another.

A rollover won’t count toward your contribution limit. So, if you have $50,000 in a Roth 401(k) and want to move it to a Roth IRA, you can do so directly—and still contribute your annual max to the Roth IRA. Just pay attention to the tax treatment. Traditional accounts should be rolled over to traditional accounts, and Roth accounts should be rolled into Roth accounts.

You can roll a traditional account into a Roth account, but you’ll have to pay taxes on a portion of the amount you move.

Each IRA account is considered separately when calculating required minimum distributions (RMDs). For example, if you have three traditional IRAs, you must perform three different RMD calculations. It’s possible to satisfy the total requirement from one account, though. You can add up the different amounts and withdraw the total from one IRA. There’s no need to take a separate RMD for each account. And, of course, you won’t include your Roth IRAs in your RMD calculations.

It’s a bit different for 401(k)s. You must calculate the RMD for each 401(k) account separately and then withdraw the required amount from each specific plan.

Although you are allowed to have multiple IRAs, it might not always make sense—unless you want to hold both Roth and traditional accounts for your tax strategy. Having several IRAs of the same type won’t increase the total amount you can contribute, but it might add complexity and fees. Additionally, it might make sense to roll your old 401(k) into an IRA when you change jobs, since you won’t be able to contribute to it anymore.

Review your situation and consider consulting with a professional as you consolidate your traditional accounts and your Roth accounts. With just two accounts to manage, it could streamline your retirement income and reduce the chance that you’ll make mistakes with your RMDs.