Can You Have Multiple Roth IRAs?
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A Roth IRA is like the Swiss Army knife of investment accounts—it’s versatile, powerful, and super flexible. For retirement, it offers tax-free growth and tax-free withdrawals after age 59½. But that’s not all! You can withdraw your contributions anytime, penalty-free, for any reason, and even tap into your earnings for qualified education expenses. Plus, with access to a variety of investment options, it’s a dream for building a low-cost, diversified portfolio.
With all these perks, it’s no surprise that Roth IRAs are a favorite. But here’s the question everyone wants to know: how many Roth IRAs can you have? And is there a limit to how much you can contribute? Let’s break it down.
How Many Roth IRAs Can You Have?
Technically, you can open as many Roth IRAs as you want—there’s no legal limit on the number of accounts. However, having multiple accounts might mean extra paperwork and management, so it’s usually smarter to consolidate unless you have a specific reason.
Is There a Limit to How Much You Can Contribute?
While you can have multiple Roth IRAs, the annual contribution limit applies across all your accounts. For 2025, the limit is:
- $7,000 if you’re under 50
- $8,000 if you’re 50 or older (thanks to catch-up contributions)
This means you can split your contributions between accounts, but the total can’t exceed these limits.
Why Would You Want Multiple Roth IRAs?
If the contribution limit is the same no matter how many accounts you have, you might be wondering, “Why would anyone bother with more than one Roth IRA?”
Great question! While most people will be just fine with a single Roth IRA, there are a few scenarios where multiple accounts might make sense:
- Inherited IRAs: If you inherit a Roth IRA from someone other than your spouse, it must be kept separate from your own Roth IRA.
- Diversifying Investments: Some investors like to keep their investments separate, maybe one account for stocks, another for bonds, and so on. It’s all about personal preference.
- Different Institutions: Sometimes, one financial institution might have better investment options, while another has better customer service or tools. Multiple accounts let you enjoy the best of both worlds.
Keeping Track of Multiple Roth IRAs
With great power comes great responsibility, right? The more Roth IRAs you have, the more you need to manage.
One big thing to watch out for is overcontributing. Since all your Roth IRAs share a single contribution limit, it’s crucial to keep track of your contributions to avoid going over.
Managing multiple accounts also makes it harder to keep your investments aligned with your overall plan. The more accounts you have, the more complex it can get to ensure your strategy stays consistent and on track.
Final Thoughts
You can open as many Roth IRAs as you like, but the contribution limits stay the same across all accounts. Keeping it simple with one account can make life easier, but if you have specific reasons to use multiple accounts, that’s totally fine too.
Need help deciding what strategy works best for you? Fruitful’s financial guides can help you build a Roth IRA plan that matches your goals and makes managing your investments a breeze.
“Fruitful” refers to Fruitful, Inc. and its wholly-owned, affiliated, and separately managed subsidiaries, Fruitful Financial, LLC and Fruitful Advisory, LLC, an SEC-registered investment adviser. To learn more about Fruitful Advisory, LLC please view its Form ADV Part 2 and Form CRS available at www.adviserinfo.sec.gov. Registration with the SEC does not imply any level of skill or training.
This information is provided by Fruitful for educational and illustrative purposes only and is not considered an offer, solicitation of an offer, advice, or recommendation to buy, sell, or hold any security. All investing involves risk, including the risk of losing the money you invest and past performance does not guarantee future performance. Only members of Fruitful have access to products and services across the Fruitful affiliates and subsidiaries.
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Frequently Asked questions
How is personalized investing part of the Fruitful membership?
Fruitful is a financial wellness membership that provides access to:
1. Expert advice and support from a dedicated Fruitful Guide, who is a CERTIFIED FINANCIAL PLANNER™ Professional that helps with all aspects of your finances and builds you a tailor-made money system.
2. 5.00% APY1 Fruitful Cash Accounts where you earn on all your money, whether you plan to save or spend it.
3. A secured charge card connected to your Fruitful Cash Account, meaning you can spend responsibly and get up to 2% cash back2 on all your spending.
4. Tailored investment portfolios with expert support at every step and no management fees.
The combo of these 4 core benefits allows our members to organize and optimize their finances in a way that’s simple, smart, stress-free, and sustainable. Members can improve their finances, make real progress toward goals, and eliminate stress. That sounds nice!
Why might this be better than other investing options?
Many available investing options can present challenges in a couple ways. You can either:
1) pay someone a lot in asset management fees to “manage” your investments, hopefully in line with your goals and risk tolerance; or,
2) go it on your own with robo advisors, hoping you clicked the right boxes to get the investments that align with your goals and risk tolerance immediately and over time.
Having a personal financial Guide advising on and supporting your decisions, combined with our streamlined process for setting up and scaling your investments means that you get a portfolio designed to meet your goals without confusion or the negative impact caused by management fees.
Wait, there are no management fees?
No, we don’t charge management fees on your investment accounts. Fruitful’s membership cost covers all member benefits. We think the absolute worst place for an investment firm to charge their fees is from your investment account because it can slow down the potential growth of your investments, and also requires that more of your portfolio is kept in cash (to be able to pay the fees) — potentially slowing it down even more. Translation - by removing the management fees the money you set aside for investing can be fully working for you, all the time, and your returns will not be eaten away by management fees, allowing them to grow more over time.
What investment options do I have?
Your Fruitful Guide will work with you to recommend the account type and asset allocation that’s right for you based on several factors, including your goals, risk tolerance, and future plans. Our investment approach is data-backed and straightforward. We build low-cost, highly-diversified portfolios primarily using exchange-traded funds (ETFs) and index funds, and may include some mutual funds. Individual stocks and bonds are not included in Fruitful’s investment strategies.
What are the advantages of using Fruitful vs. a robo-advisor?
Robo-advisors often make portfolio recommendations without the full context of your larger financial picture and how that changes over time. For instance, if you told a robo-advisor you have $10k to invest in a brokerage and need the money in 15 years, it might recommend an asset allocation that addresses only that information. That may not be helpful and aligned with the other parts of your financial roadmap. Fruitful believes it’s important to take a step back and ask, “Hey, what else is going on? Do you have credit card debt to pay down, are you buying a house soon, how have you been saving for retirement?” Our financial Guides help you navigate decision making at every step by understanding your entire financial world and optimizing your investment approach accordingly.
How are the investment approaches and portfolios built?
Our Guides tailor members' investment approaches to their personal goals, lifestyles, timelines, and risk-tolerances. Our portfolios are built from a carefully curated list of low-cost index, mutual, and exchange traded funds to minimize expenses and maximize diversification, providing members with broad exposure to different asset classes including domestic, non-US developed, and emerging stocks as well as corporate, government, and international bonds. Our core aim? Striking the risk-reward balance that's right for each member and their unique financial journey.
How do the Fruitful Guides help?
Your financial Guide is like your holistic financial wellness guru — they get a picture of your entire financial life, what’s going on now, and what’s coming down the pipeline to determine how to optimally allocate and invest your money to balance the many priorities you may be juggling. Your Guide will help you choose the right approach based on your goals, tolerance for risk, and timeline, among other factors.
Can I change my investment strategy over time?
Yes, and this is expected and accommodated as your financial goals and priorities shift over time. Your investment strategy is a part of your larger financial strategy that you and your Guide will work on together.
What kinds of accounts are available to Fruitful Members?
Fruitful supports and manages individual, joint, and trust non-retirement accounts as well as Roth, traditional, rollover, simple, and SEP IRAs. We can also provide strategy, ongoing advice, and support on investments not directly managed by us. Fruitful also offers a high-yield cash account. Learn more here.
What are the expense ratios on Fruitful portfolios?
An expense ratio is a yearly fee that mutual, index, and exchange-traded funds charge. If a fund has a 1% expense ratio, you're shelling out $1 for every $100 you put in. High fees can eat into your returns big time. Fruitful managed investment portfolios have an average expense ratio of just 0.048%. That’s really low - around 1/10 of the average expense ratio across the fund industry, which was 0.47% in 2022.¹
¹Mutual fund and ETF expense ratio averages sourced from Vanguard. Link here.
Can I transfer or rollover my existing investment accounts to Fruitful?
Yes! Talk to your Guide about this process and what it means for your current holdings. At Fruitful, our investment approach is built around diversification, so we don’t hold individual stocks or bonds in our Members’ accounts. Not only does this align with our advice, but it helps us keep our costs low and our service seamless. Any positions you transfer in will be sold and reallocated based on the asset allocation you determined with your Guide.
I currently own stock in my employer. Can I transfer that to Fruitful, too?
Our portfolios are designed around diversification using exchange-traded funds, index funds, and sometimes mutual funds. If you want to maintain some employer stock, you should keep that outside Fruitful. That said, your Guide may recommend diversifying some of those holdings, and in that case, you can make a transfer of some stock to Fruitful, where it can be sold and allocated based on your personalized portfolio.
Is my money safe?
Fruitful Cash accounts are held at our sponsor bank – Emigrant Bank, Member FDIC, which was founded in 1850, and is one of the largest privately held banks in the United States.
Fruitful is a financial technology company, not an FDIC-insured bank. Funds in your Fruitful Cash account(s) are held at Emigrant Bank, an FDIC-insured institution. While there, your funds are FDIC insured up to $250,000 and covered in the event of the failure of only Emigrant Bank. Fruitful must meet and satisfy certain conditions for pass-through deposit insurance coverage in the event of Emigrant Bank’s failure.
Fruitful Advisory, LLC, is an investment adviser registered with the U.S. Securities & Exchange Commission (“SEC”) that employs full-time Financial Guides, all of whom are investment adviser representatives and CERTIFIED FINANCIAL PLANNER™ professionals. Investments in member accounts are held at and cleared by APEX Clearing Corporation, member FINRA/SIPC, who custodies over $120 billion in total assets as of June 2023.4
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© Fruitful 2024 — All rights reserved. “Fruitful” refers to Fruitful, Inc. and its separate, affiliated subsidiaries. Fruitful, Inc. is an investment adviser registered with the U.S. Securities & Exchange Commission, offering investment advisory products and services exclusively to Members with an active Subscription. Learn more about Fruitful in our Form CRS.
This information is provided by Fruitful for educational and illustrative purposes only and is not considered an offer, solicitation of an offer, advice, or recommendation to buy, sell, or hold any security. All investing involves risk, including the risk of losing the money you invest, and past performance does not guarantee future performance. Rebalancing cannot assure a profit or protect against loss in a declining market. Fruitful relies on information from various sources believed to be reliable, including information from its Members, Clients, and other third parties, but cannot guarantee the accuracy or completeness of that information.
Fruitful is a financial technology company, not a bank. Deposit accounts provided by Emigrant Bank, Member FDIC. Funds in the bank accounts are insured for up to $250,000 per depositor, depending on the ownership category. Interest rates are variable and subject to change at any time. These rates are current as of July 18, 2024.
¹ The people in these videos are real Fruitful Members who were paid in cash for their time and participation in this series. We think that is fair. Each testimonial reflects the individual Member's experience as an advisory Client and is not intended to represent any other Member's or Client's experience. We believe in the integrity of this approach and that, outside the conflict of interest present due to compensation, no other conflicts apply to these testimonials. These Client testimonials were given in October 2023, represent the opinions of each Member at that time, and may have been edited for brevity and clarity.
² Cost of traditional advisory firms sourced from The Kitces Report, Volume 2, 2022, Figure 61. Distribution Of Typical Annual Retainer Fee.