Can you have multiple Roth IRAs?

According to a report from the Investment Company Institute (ICI), Individual retirement accounts, or IRAs for short, make up for over 30% of Retirement assets held by Americans. To make it more understandable, IRAs account for $9.2 trillion out of the entire amount of $28.2 trillion.

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But what is the point of IRAs, you may ask?

Well, IRAs are popular among those who wish to save for retirement because they allow you to increase your money while deferring taxes. An individual retirement account or an individual retirement arrangement (IRA) is a type of retirement account. Its primary purpose is to motivate and encourage you to put money down for your retirement. The valuable characteristic of Individual retirement accounts is you can open an account entirely on your own, regardless of your income. The only requirement is to have enough money to contribute. The goal of an IRA is to allow you to make tax-advantaged contributions.

There are various types of IRAs, each with its own set of restrictions and perks. A traditional IRA allows you to make pre-tax contributions and later claim a tax deduction (put off in time what you owe to IRS). Until you retire and start drawing distributions, the money in the account can grow tax-free.

When you receive distributions, you must pay taxes on the amount received. If you have a Roth IRA account, you will make ira contributions after you have paid your taxes. Your money can then grow in the account, and your payouts will not be taxed once you retire.

To explain it more straightforward, as an account holder, you contribute after-tax cash to a Roth IRA, your money grows tax-free, and you may generally make tax- and penalty-free withdrawals beyond the age of 59,5. You can contribute pre- or after-tax funds to a Traditional IRA, your money grows tax-deferred, and withdrawals are taxed as current income after the age of 59,5.

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In today’s article, we want to take a closer look at the idea of having multiple Roth IRAS. We will determine if it is even possible and what may be the probable advantages and drawbacks. We will cover subsequently:

  • Can you have more than one Roth IRA?
  • Benefits of having multiple Roth IRAs
  • Cons of having multiple Roth IRAs
  • The five-year rule
  • A good alternative to secure your future – The Infinite Banking Concept

The possibility of multiple Roth IRAs and how many can you have?

Lucky for you, the answer to ‘Can I have more than one Roth IRA?’ is positive. You have the option of having two or more IRAs, Roth IRAs and even SEP IRAs. What is more, there is an unlimited number of Roth IRA accounts you can have. If you roll over 401k assets into a regular IRA and have a Roth IRA, you may have more than one IRA. Similarly, you might have a Roth IRA outside of work and a SEP or SIMPLE IRA at work. It’s critical to keep in mind the contribution limitations’ rules if you have numerous IRA accounts.

Having numerous IRA accounts is not prohibited by the IRS. However, there are some limitations. It’s crucial to remember that the total amount of your contributions to all of your individual IRA accounts for the year cannot exceed the annual contribution limit.

For modified adjusted gross incomes of less than $140,000 (single filers) or $208,000 (married couples filers), the contribution ceiling (Roth IRA contribution limit) in 2021 is $6,000 ($7,000 if 50 or older) (married filing jointly). People who are 59,5 years old or older and have held accounts for at least five years are eligible to withdraw funds without paying federal taxes. In other words, you can contribute a total of $6,000 to regular or Roth IRAs if you are under the age of 50. For people aged 50 or older, the maximum amount is higher, exactly $1,000. They can contribute a total of $7,000 every year to their Roth IRA account. Keep in mind that this is a total amount, so you won’t be able to contribute that much to each IRA you own.

However, there is a good chance that the brokerage will limit you to only one account type. In that situation, you can always choose a different brokerage.

The benefits of multiple Roth IRAs

Multiple Roth IRAs can help you better your tax approach while also providing you with more investment options and account insurance. The advantages of having several IRAs are as follows:

Tax savings

Varied types of IRAs offer different tax benefits. A typical IRA provides an immediate tax deduction, allowing you to defer paying taxes until you begin withdrawing funds from the account in retirement. Although there is no tax advantage on donations to a Roth IRA, the eligible withdrawals are tax-free. However, early withdrawal usually results in an early withdrawal penalty fee.

Easy withdrawals

Traditional and Roth IRAs have distinct regulations governing withdrawals both before and during retirement, in addition to how your assets are taxed. Contributions to a Roth IRA (not earnings) can be withdrawn tax-free and penalty-free at any time for any reason. Traditional IRAs offer limited flexibility. However, they do allow for penalty-free early withdrawals (before age 59,5) in certain circumstances. Withdrawals from a regular IRA, unlike the Roth, are required after age 72. With the Roth, no minimum withdrawals are required


Having IRAs at many financial institutions might expose you to various sorts of investments and even investing strategies. Let’s say you want to have the majority of your retirement funds professionally handled, but you also want to utilize a portion of it to invest in individual stocks on your own. You might open one IRA with a robo-advisor (for low-cost, automated portfolio management) and another with a discount brokerage that offers stock trading — or you could open two separate accounts with the same firm if it provides both services.

Higher coverage

SIPC and FDIC insurance on investment and deposit accounts can cover your losses if the brokerage or bank where your IRA is held collapses. Coverage is normally capped at $500,000 (SIPC) and $250,000 (FDIC) for a single account holder at a single institution, although there are options to expand your coverage by opening numerous accounts. If you have two Roth IRAs at the same SIPC-insured institution, for example, you are only eligible for $500,000 in coverage. However, if you hold both a Roth and a regular IRA at the same institution, each account is treated as a different covered entity, with SIPC coverage of $500,000 for each.

Estate planning is easier than ever.

The procedure of establishing an IRA includes naming beneficiaries. While you can name more than one beneficiary per IRA (primary and contingent), having various people named on separate accounts can help you avoid beneficiary squabbles when you pass away.

No age limit

Anyone, even minors, who are given a salary, tips, or hourly pay for their work (earned income) is eligible to contribute to a traditional IRA. This implies that as soon as your children obtain their first job, they can begin saving for retirement. Because it provides for long-term, tax-deferred savings, an IRA is a great alternative for kids who earn more than they intend to spend. As long as they have earned money, senior citizens can continue to contribute to Roth IRA accounts. This is a great place to put money that will be passed down as an inheritance. Prior to the passing of the 2019 SECURE Act, seniors could not contribute to traditional IRAs after reaching the age of 70,5, but now they can do so at any age as long as they had earned income. Contributions to regular IRAs are no longer restricted by age.


You can contribute to a Roth IRA whenever you want and for as much as you want. You could, for example, make a $6,000 contribution on the first day of the year or spread it out over several months. You have till the end of the fiscal year to file your taxes.

No minimum distributions

Unlike traditional IRAs, Roth IRAs do not have required minimum distributions (rmds). After the age of 70,5, it is up to you if you want to contribute or not.

The cons of having more than one Roth IRAs

Of course, there cannot only be a sunny side. Multiple Roth IRAs come with several drawbacks. However, there is a significantly smaller amount than of the good aspects.

Harder to track

Due to the allocation of your assets, it may be trickier to have control over your retirement savings account and therefore require much more energy and involvement to monitor your funds.

Much more paperwork

Various accounts require dealing with multiple tax forms, notices of service changes/updates, privacy policies, and other disclosures, even though it’s easier than ever to track and manage your money online.

Quite risky

It’s natural to give higher-balance accounts more attention while leaving the smaller ones alone. However, failing to care for and maintain a retirement savings account can result in poor investment returns, particularly when it comes to investment costs, which can range from brokerage fees to mutual fund sales charges and erode your earning potential over time.

You have to check your eligibility

If your income is too high, a Roth IRA may not be a choice. For those filing as a single or head of household and earning more than $125,000 in 2021, eligibility begins to dwindle. You can no longer donate once your wages reach $140,000. The cut-off for joint filers in 2021 is $208,000, with a phase-out over $198,000. Remember that the deadline for contributing to a Roth IRA coincides with the tax filing deadline for that year.

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The five-year rule

Because Roth contributions were not tax-deductible when they were deposited, the account holder of a Roth IRA can withdraw them tax-free at any time. On the other hand, the five-year rule requires that the account be at least five years old before the earnings can be distributed tax-free. To figure out how old your account is, start with the account’s “birthday.”According to the IRS, the “birthday” of the Roth IRA is January 1 of the tax year in which you make your initial contribution. The five-year clock starts on January 1, 2020, if you form a Roth IRA and make your first contribution in April 2021 for the 2020 tax year. As a result, on January 1, 2025, you will be able to withdraw tax-free any earnings made over the course of those five years. (Source)

The five-year rule vs. Roth IRA conversion

The transfer of cash or assets from a pre-tax account (such as a Traditional IRA) to a Roth IRA is known as a Roth conversion (rollover). Although this can be a cost-effective approach to consolidate your retirement holdings for future tax-free withdrawals, Roth conversions have their own five-year timeframe within calendar year start dates. Let’s say you make your first Roth contribution in April 2021 for the tax year 2020 and then convert to a Roth in March 2022, as in our prior scenario. The initial contribution amount’s five-year period begins on January 1, 2020 (and will continue to do so for all subsequent donations), but the conversion amount’s five-year period starts on January 1, 2022. An extra conversion in September 2023 would have its own five-year clock that would begin on January 1, 2023.

Why bother with the conversion, you may ask? Well, a traditional IRA does not have set income limits, while the Roth IRA account has. The amounts have been already mentioned before, but to repeat them:

for a single person: $140,000

for married filers: $208,000

Making Roth contributions and converting your accounts might help you maximize your retirement investing strategy, but maintaining numerous five-year time frames can be tricky. The five-year rule has the undesirable side effect of allowing non-qualified distributions to occur without the account holder’s knowledge, resulting in income taxes and, in some cases, early distribution penalties. Holding multiple Roth IRAs, one for each five-year period your overall post-tax portfolio is subject to could help you avoid this undesirable outcome. Keeping things separate can assist in keeping things in order.

Secure your future

We do not want you to set already on multiple Roth IRAs as a primary investment strategy. Consider managing your personal finance differently. That is why we would like to introduce you to another investment option – The Infinite Banking Concept.

Infinite Banking allows you to imitate how a traditional bank operates and borrows money, but without the need to depend on a third party. You will be both a creditor and a lender.

Instead of borrowing from a bank, you borrow money against yourself and single-handedly dictate cash flow while still allowing your whole life insurance policy to earn dividends (money) even though you are using that money elsewhere. In other words, you build wealth while borrowing and repaying the money held in the cash value of your permanent life insurance policy.

That being one of the most significant advantages of the whole life insurance policy, you will never have to deal with banking fees or interest rates on loans. As a policyholder, you can borrow money using your own policy’s cash value. Using this borrowing setup, you would never have to borrow money from a bank again and instead would borrow for yourself (your whole life insurance policy) and pay yourself back over time. Thus, being your own bank.

The goal of Infinite Banking is to duplicate the process as much as possible to build the value of your own bank. The duplication process happens by lending and repayment of money typically held in the cash value of a permanent life insurance policy.

Infinite Banking allows you to better work towards your individual and unique financial goals for yourself and your family and have control over your finances without dealing with banking fees or interest rates on loans.

Infinite Banking involves:

  1. Overfunding (with after-tax funds) a high cash value whole life insurance policy from a life insurance company
  2. Accumulation of Cash Value(tax-free) throughout the years you are a policyholder of your Whole Life insurance policy.
  3. Tax-Free Loans taken out against your whole life insurance policy’s cash value to use for your financial expenses.

By the process of borrowing for yourself, repaying, and so on – simply by being your own bank, you earn the financial freedom and control of your money.

Implementing this banking strategy into your life gives you much better control over your finances and helps you build wealth using the life insurance policy.

Final thoughts

We hope that we helped you determine if possessing multiple Roth IRAs is beneficial and suitable for your needs. However, we wanted to make sure you have all of the resources to consider other methods.

Constantly using bank services offered by traditional entities will never allow you to free yourself both financially and mentally. Owing money to the bank always weighs on your shoulders. Therefore, bank on yourself!. Remember – the same way banks benefit from their fees, interest rates on loans – you can too. Build wealth by mimicking the banking process of loaning and repaying.

Choose financial freedom and own your own lifestyle!