How many IRAs can you have?
How many IRAs, traditional and Roth, can a person purchase per year?
-- Gloria Grab-Bag
It's not the number of accounts but the aggregate contributions
to those accounts that matters. Assuming you're eligible to contribute to both
traditional and Roth IRA accounts, it's the sum of all the contributions attributable
to that tax year that matters.
IRS Publication 590, Individual
Retirement Arrangements spells out contribution eligibility and contribution
limits. The Bankrate feature, "2006-07
retirement plan contribution limits," lists the maximum contributions.
you can't decide between a traditional IRA and a Roth IRA, use one of the interactive
work sheets available on many financial Web sites. I like the one on Fidelity's
site. If you want to own both, and are eligible to contribute to both types
of IRA accounts, then I'd suggest varying by year your contributions to a type
of account, at least initially. That's because smaller accounts tend to have account
fees that are waived for larger accounts.
I think it is best when starting out building wealth in retirement accounts to
concentrate your investments in diversified mutual funds rather than diversify
your investments in concentrated mutual funds or individual stocks. Find a mutual
fund family that offers no-load, broadly based mutual funds with low expense ratios
and open up an account with them. A no-load index fund can be a good choice. Before
taking the plunge, learn more about mutual funds by attending Morningstar's free