As if self-directing one IRA wasn’t powerful enough, did you know you can self-direct two? (Or three? Or more?) As a matter of fact, there is no limit to the number of IRAs you can own. It’s not uncommon for savvy investors to open more than one, depending on their retirement goals and investing decisions.
Self-directed IRAs deliver an entire world of alternative investments to your door. These assets exceed the typical Wall Street norm, presenting diversity and the potential to build income in your portfolio. Self-direction gives you control over your own retirement funds and investing decisions—allowing you the freedom to flex your investing prowess and delve into assets that you know best.
Regardless of how many IRAs you have, your annual contribution limit remains the same across all accounts. That’s $5,500 a year max, not $5,500 for each account. However, there are several solid reasons having more than one IRA may be the thing for you to do.
Consider opening more than one IRA if:
- You invest in a myriad of assets. Using different IRAs for this purpose can be beneficial—especially if your investments involve extensive deposits and expenses like rentals and rehabs. Separate accounts can simplify keeping track of the accounting for each asset.
- You want to easily gauge the performance of each investment. Using different accounts to invest makes it easier to closely hawk each asset to determine if its worthy of remaining in your portfolio.
- You want the benefits of tax-deductible contributions AND tax-free income. Traditional IRAs allow tax-deductible contributions now that incur tax later when you retire and begin taking distributions. Roth IRA contributions, on the other hand, are made after tax—allowing you to take the hit now instead of later in case income tax rates rise by the time you retire. If you’re income level allows you to contribute to a Roth, you might consider owning both a Roth and a traditional IRA to take advantage of a deduction and still have the opportunity to earn tax-free retirement income.
Advanta IRA is a self-directed retirement plan administrator serving clients across the nation. Our mission is to enlighten and empower investors who want the control these accounts offer and to explore the diverse world of alternative investments.
To learn more, consider attending one of our complimentary webinars or seminars. We offer these weekly at no cost to attendees so you can discover how self-directed investing can help you reach your retirement planning goals.
Don’t want to attend an event? Pick up the phone and call us. Any one of our team members has the expertise to answer all of your questions about self-directed IRAs.