Roth IRAs are a popular retirement vehicle that shields your earnings from capital gains taxes.

In some instances, tax-savvy individuals can benefit from opening multiple Roth IRAs with different brokerages and custodians.

This guide will explain everything you need to know about opening multiple Roth IRAs and the pros and cons of this strategy.

Can You Have Multiple Roth IRAs?

Yes, it’s important to establish that you can have more than one Roth IRA. You can also have a Roth IRA and other types of individual retirement accounts, such as a traditional IRA or a SEP IRA.

The IRS does not limit the number or type of IRA accounts you can have, but it does limit the amount of money you can contribute to any IRA account each year (Roth IRAs carry additional limits based on your tax filing status and income). Therefore, if you contribute to one Roth IRA, it will count toward the contribution limits of another Roth IRA.

As of 2024, your annual contributions across all IRAs cannot exceed $7,000 or $8,000 if you’re 50 or older.

However, if you have a Roth IRA, your annual contribution limit could be decreased if:

  • You are a single taxpayer or head of household and make $138,000. If your income exceeds $153,000, you cannot contribute.
  • You are married and filing jointly, and your combined income is more than $230,000. If your income exceeds $240,000, you cannot contribute.
  • You are married but filing separately, and you make more than $10,000. If your income exceeds $10,000 per year, you cannot contribute to a Roth IRA.

When you invest in tax liens, earnings come from the interest applied to the lien

Benefits of Having Multiple Roth IRAs

If you have a Roth IRA, it may be tempting to limit investments to that account, but opening a second or multiple Roth IRAs could open up additional investment opportunities. Here are a few benefits of having multiple Roth IRAs:

  • Diversify your investments. Opening more than one Roth IRA, especially at different financial institutions, gives you access to different investment options and thus limits dependence on one portfolio for growth.
  • Plan inheritance. Roth IRAs are funded with after-tax dollars, so withdrawals aren’t taxed. That’s true for you as well as your beneficiaries who may inherit each IRA.
  • Increased insurance protections. Like other types of financial accounts, Roth IRAs are insured by the FDIC. Coverage is limited to $250,000 for all IRAs at a specific institution, not per account.

For instance, let’s suppose you have an IRA at Bank A and decide to open a second one. The total value of your IRAs are $300,000, but because they are both held by the same financial institute, the FDIC will only insure the combined value up to $250,000. If you open the second IRA at Bank B, you’ll have $250,000 in coverage for each account, thus extending your insurance protections.

Instances It Makes Sense to Have Multiple Roth IRAs

It may not make sense for the average investor to open multiple IRAs. Nevertheless, there are instances where investors can benefit from having multiple IRAs.

You want extended insurance protections.

If the value of your IRA exceeds the FDIC IRA insurance limit ($250,000 per institution), opening multiple IRAs at different financial institutes can help you gain additional coverage.

You plan to use your Roth IRA as an inheritance vehicle.

When you open an IRA, you can choose a beneficiary or the individual(s) who will receive the account balance upon your death. While you can attach multiple beneficiaries to a single IRA, you can also open up multiple accounts and simplify the process by assigning one beneficiary to each account.

You plan to be in a higher income tax bracket during retirement.

Traditional IRAs are funded with pre-tax dollars, and withdrawals are taxed based on your income at the time. Roth IRAs are funded with after-tax dollars, and qualifying withdrawals are tax-free. If you think you will be in a higher income tax bracket when you start making withdrawals, and you want more than one IRA, it may make sense to have multiple Roth IRAs instead of a traditional IRA and Roth IRA.

You want to diversify your retirement strategy.

When you open a standard Roth IRA, you rely on the investment portfolio specific to that account. You can diversify your strategy by opening multiple IRAs at different institutions or even opening a self-directed IRA with a custodian to expand into alternative assets.

Gaining Flexibility with a Self-Directed Roth IRA

When you open a standard Roth IRA, your investments are limited to the options provided by the institute. For some investors, that’s a reliable, hands-off approach to retirement savings, but a managed account can also limit your earning potential. If you want more control over your retirement strategy, consider a self-directed Roth IRA.

A self-directed IRA (SDIRA) expands your investment options to include alternative assets, such as real estate, precious metals, and private equity. Standard IRAs cannot hold these assets.

In addition, SDIRAs give you more control over how and when you leverage account funds to make investments.

Since you can have multiple Roth IRAs, you can maintain a standard IRA while opening a self-directed IRA elsewhere, allowing you to diversify your portfolio, gain investment flexibility, and increase insurance protections.

Having multiple IRAs can often be a simpler way to navigate around inheritance and increase your insurance coverage. Be sure to perform your due diligence as you shop around with different institutions and custodians if you are thinking about opening a second retirement plan.


Can I contribute to multiple Roth IRAs in the same tax year?

Yes, you can contribute to multiple Roth IRAs in the same tax year, but your total contribution must not exceed the annual contribution limits set by the IRS.

As of 2024, the annual contribution limit is $7,000, with an additional $1,000 for individuals age 50 or older. Roth IRAs are also subject to additional limits based on your income and tax filing status, so always consult the latest IRS guidance.

How do I manage and track multiple Roth IRA accounts?

If you have multiple Roth IRAs, make it a point to record your contributions, whether weekly, monthly, or at other intervals, to ensure you don’t exceed the IRS limits.

You can track multiple Roth IRAs in several ways, using something as simple as an Excel sheet in which you manually track data or more advanced accounting apps and platforms that allow you to link and track your accounts.

Are there specific advantages to having Roth IRAs with different financial institutions?

Yes, by opening Roth IRAs at different financial institutions, you can diversify your investment by tapping into the different portfolios offered by each institution. Opening accounts at multiple institutions can also increase insurance protections, as the FDIC will provide up to $250,000 in IRA coverage per institution.

Can You Have a Traditional and Roth IRA?

Yes, you can have and contribute to a traditional and Roth IRA in the same tax year. However, the IRS limits how much you can contribute across all IRA accounts, regardless of how many, each year. The current limit is $7,000 per year ($8,000 if you’re age 50 or older) regardless of how many IRAs you have.