Multiple accounts

[Guest travler]

Is it legal to have several different Roth IRA's from different providers (started in different years)? Any big benefits to keeping them all together?

[JanetM]

Yes it is legal - you can open a new IRA (or Roth) every year. The limits on contributions are set by IRC.

Why would you want to have multiple accounts - each with a small balance and incurring fees? I would want to consolidate the IRA's or Roths to single IRA or Roth. This would lessen fees and give you more opportunity to diversify your holdings.

[John G]

Limitations on contributions apply to the person, not to the account. Therefore, you can't put aside more money by having more accounts. (you probably knew that! but it has come up before on this message board)

I agree with above answer.... but IRC should read IRS.

Generally, you don't want to get crazy with IRA fragments becuase you start having problems tracking your money and performance. While you may find some mutual fund that is not available though the major brokers, every major brokerage sure gives you availability to more funds that you could ever completely study. Fragment IRAs can also mean more annual fees and if you are buying individual stocks, inefficient purchases due to small block size.