There's no limit to the number of individual retirement accounts (IRAs) you can own. No matter how many accounts you have, though, your total contributions for 2018 can't exceed the annual limit of $5,500 (or $6,000 for 2019), or $6,500 ($7,000 for 2019) for people 50 and over.
OK, so I can have multiple IRAs, but should I?
Here are a few reasons why that might not make sense. Planning for retirement is challenging enough without having to review performance across a broad range of accounts, and keeping
multiple IRAs open can make it harder to maintain an asset allocation that's aligned with your goals.
Keep in mind that your IRA assets are there to satisfy multiple needs when you retire, such as:
- steady income
- long-term growth
- tax efficiency
- wealth transfer
"Unless it's been recently rebalanced, the IRA from a job you left five years ago may not reflect your personal goals and risk tolerance anymore," says Debra Greenberg, a director in the Personal Retirement Solutions Group at Bank of America Merrill Lynch.
"Unless it's been recently rebalanced, the IRA from a job you left five years ago may not reflect your personal goals and risk tolerance anymore"
— Debra Greenberg, a director in the Personal Retirement Solutions Group at Bank of America Merrill Lynch
"Consolidating some of these accounts can be an important first step to realigning with your goals. If you're holding IRAs from several jobs, you have choices for what to do with your assets in employer sponsored plans," Greenberg suggests.Footnote 1
What about married couples? Does it make sense for them to have multiple IRAs?
Just as with single filers, married couples can have multiple IRAs — though jointly owned retirement accounts are not allowed. You can each contribute to your own IRA, or one spouse can contribute to both accounts. Married couples that file a joint return can also take advantage of a spousal IRA, which allows one spouse to contribute and reap the full benefits of an IRA without collecting income, so long as the other spouse is working and has sufficient income. If one spouse is contributing to both accounts, the total contribution can't exceed your joint taxable income or double the annual contribution limit on IRAs, whichever is less. For 2018, the top amount is $11,000 if both spouses are under 50; $12,000 if only one spouse is under age 50; or $13,000 if both spouses are age 50 and older. (For 2019, those amounts go up to $12,000, $13,000 and $14,000 respectively.) Be aware that your eligibility to deduct contributions to an IRA is phased out, based on modified adjusted gross income (MAGI) ranges that are published annually and correspond to your federal tax filing status.