Roth Ira Various Investments

[Guest JGerman268]

Can a Roth IRA be invested in a Mutual Fund ($3000) the first year and the second year invest that $4000 in another Mutual Fund or Stock, thus having two Roth Ira's and as a matter of information a different Fund or stock in succeeding years?

To make my question a little clearer, I understand that it would be only one Roth IRA but there would be two different investments with two different holders or Trust Companies (if that is the proper term) of this Roth IRA. This is OK?

[GBurns]

You would still have only 1 Roth IRA. What you have are 2 investments not 2 Roth IRAs. It is the money held in a Roth that is invested NOT the Roth.

[Appleby]

…which means you can do what you are asking. For instance, assume you establish Roth IRA # 123456 at custodian X and deposit $3,000 to your Roth IRA. The $3,000 can be invested in a mixture of assets as allowed by the custodian. For example--- several mutual funds, stocks, bonds or a mixture of….the new deposits can be invested in different assets or the same assets if available at the custodian

[John G]

Some clarifications:

Gburns - what you said may be a little misleading. In his scenario he might have two different custodians, with two different account numbers, two different investments and perhaps different beneficiaries. I would call that two Roths. I would only call it one Roth if he made multiple investment choices but with a single custodian holding all the assets.

JG - the firm that has your funds is generally called the "custodian"

Appleby + JG - yes, you can have multiple mutual funds under a brokerage (often with different mutual fund families) or within a mutual fund family (like T Rowe, Vanguard, Scudder, etc.). {Note, Fidelity and some other "names" are both a brokerage and a mutual fund family.} But... I think JG may have been thinking of different investments with different custodians - and the answer is clearly YES.

JG - yes, also to mixing stocks with mutual funds at various fund families, brokerages, banks in any combination of investments and custodians who choose.

To all - the IRS does not care about what investments you choose (as long as they are allowed), how you split up the assets, or what custodian(s) you elect. The IRS is concerned about the rules concerning maximum contributions, withdrawals, taxable events, and income/filing status qualifications.