Roth IRA contribution

[Guest ajs6]

Can I contribute to multiple Roth IRAs or is my 2001 tax year contribution limited to one Roth IRA? Please advise.

AJ

[Appleby]

You may contribute to multiple Roth IRAs, however, your contribution limit remains the same, i.e. $2,000 or 100% of compensations, whichever is less.

Due to the fees that may apply to the individual accounts, it may not make financial sense to fund multiple accounts.

[John G]

Lets be careful about max annual contributions: $2,000 for tax year 2001, $3,000 for tax year 2002 and if you are age 50+ $3,500 for tax year 2002. Spouse account is a separate issue and can be based on income for either adult. All Roth numbers, I assume that you satisfy the earned income and max income requirements. Number of custodians or accounts has no impact, all contribution regulations are evaluated based upon the total for the tax year for each spouse. Besides the fees, simple management/tracking of your money gets more complicated when you split up the assets.

[Guest Paleo]

This is not a reply to AJ.............instead I'm humbly piggybacking on his initial query as I haven't figured out yet how to make a new inquiry.

With that said, here's my Roth question: I have two Roth accounts; one, let's call it "A", that I started a couple of years ago as a replacement for my traditional IRA. I have invested $2,000 in this account annually, in monthly increments. The second account, (B) is a recent 100% Roth conversion of an old traditional IRA.

Can I now make monthly pro rata contributions to this "conversion Roth" or must I continue to invest only in the 'A' account.

Paleo

[John G]

To start a new topic, click the "new tread" button in the upper right of the main listing page.

You can contribute to either account. You can also combine both into one account by using a custodian to custodian transfer. Combining them may make it easier to monitor and get investment decisions implemented. You might also eliminate an annual fee, although there are plenty of places that charge no fees for IRAs.

When Roths were first developed there was about a 1 year period where custodians felt conversions had to be kept separate. Technical corrections eliminated that issue. If your custodian says otherwise, go up the chain to someone in the IRA back office who is likely to be better informed.

However, I would not do anything at all with the conversion account until you absolutely know for sure that you meet the qualifications and will not have to revert those funds back to an IRA. Less heartburn for you and the custodian to be cautious.