IRA (individual retirement accounts)

There are exactly three classifications of Individual Retirement Accounts (IRA) for individuals.

1. Traditional IRA (Traditional individual retirement account)
2. Roth IRA (Roth individual retirement account)
3. IRA Rollover (Rollover individual retirement account)

Throughout this IRA rules website, we will completely explore these different types of Individual retirement accounts (IRA), along with IRA s that are more suitable for businesses such as SEP IRA and SIMPLE IRA. To continue learning about IRA rules of these three types of individual retirement accounts, please use the side menus.   

With the current Social Security and social security benefits situation (Click here to read about Social Security and its benefits.), many people have to rely on their own retirement plans such as 401k retirement accounts, 403b retirement plans, and individual retirement accounts, instead of their Social Security benenfits. In many cases, 401k retirement account or employer retirement plans are not enough for people to retire on. They need to supplement their retirement income by investing in individual retirement accounts (IRA).

How many IRA accounts can I open?

With the current IRA rules, you can open more than one IRA account. If you are eligible to open an IRA, then you can open as many IRA as you wish.

For example, you can have 2-3 traditional IRA accounts and a few Roth IRA accounts. However, the drawback is that you will have to keep track of all your IRA accounts yourself. If you have many IRA accounts, this can be cumbersome when it comes to filing taxes and reporting to the IRS. Many people with more than a few individual retirement accounts find themselves losing track of what investments they own in which IRA after a while.

The IRS does not mind how many IRA accounts anyone has. What the IRS minds is how much you have contributed to your IRA accounts in total in any one year and whether you are taking required minimum distributions (RMD). If you have 3 IRA accounts and your maximum IRA contribution is $4,000 per year, then you can only contribute $4,000 to your IRA accounts. How you distribute that $4,000 among all your individual retirement accounts is up to you.

Investment Tax Deferred

One of the benefits of IRA accounts is the tax advantage. Under traditional IRA rules, for traditional IRA accounts, you can contribute (put money into your IRA account) tax deferred. Traditional IRA rules allow you to put money into your traditional IRA tax deductible. Under Roth IRA rules, for a Roth IRA, your contribution is taxed but when you withdraw money out of the Roth IRA, the withdrawn money is tax free.

• Traditional IRA
• Traditional IRA rules
• Roth IRA
• Roth IRA rules
• IRA rollover
• Rollover IRA rules
• SEP IRA Rules