How many retirement plans can i have

The same holds true for retirement income. When you spread your savings across different types of taxable and non-taxable accounts, you give yourself flexibility in retirement to combine various streams of income in a way that allows you to minimize taxes and maximize income.

If you pull the extra money from a taxable asset, you may inadvertently bump yourself into the next higher tax bracket — increasing your overall tax liability. But if you could augment your income with tax-free money, you could avoid moving to a higher tax bracket. These accounts were established by the federal government to encourage people to save for retirement and discourage them from raiding their nest egg to finance other goals or to cover unexpected expenses.

So some of your savings needs to be in other types of accessible accounts. So, what should you consider? After that, talk with your financial professional about your other options:. Consolidating some of these accounts can be an important first step to realigning with your goals.

Since Roth IRAs offer the potential for tax-free distributions, it may be a good idea to add money to a Roth account, if eligible, while you are in a lower tax bracket and think you may be in a higher one at retirement.

Having a Traditional IRA may be better if you are in a higher tax bracket now and prefer to bring your current taxable income down. Be aware that if you participate in an employer-sponsored retirement plan, your eligibility to deduct contributions to a Traditional IRA is phased out, based on modified adjusted gross income MAGI ranges that are published annually and correspond to your federal tax filing status.

If you are eligible for a Roth IRA, your annual contributions are made with after-tax dollars and are not tax-deductible. Just as with single filers, married couples can have multiple IRAs — though jointly owned retirement accounts are not allowed. You can each contribute to your own IRA, or one spouse can contribute to both accounts.

Married couples that file a joint return also can take advantage of a spousal IRA, which allows one spouse to contribute and reap the full benefits of an IRA despite having little or no taxable compensation, so long as the other spouse is working and has sufficient taxable compensation.

If one spouse is contributing to both accounts, the total contributions generally can't exceed your joint taxable compensation or double the annual contribution limit on IRAs, whichever is less.

Related Questions Should I roll over my k? Should I roll over my b to an IRA? What happens if you exceed IRA contribution limits? Consolidating your retirement accounts? Should I roll over my k? Find a local Merrill Financial Solutions Advisor. Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You have choices about what to do with your employer-sponsored retirement plan accounts.

Depending on your financial circumstances, needs and goals, you may choose to roll over to an IRA or convert to a Roth IRA, roll over an employer-sponsored plan from your old job to your new employer, take a distribution, or leave the account where it is. Each choice may offer different investment options and services, fees and expenses, withdrawal options, required minimum distributions, tax treatment, and different types of protection from creditors and legal judgments.

These are complex choices and should be considered with care. Asset allocation, diversification, and rebalancing do not ensure a profit or protect against loss in declining markets. Connect with us:. I'd Like to. Copyright FactSet. All rights reserved. Footnote asterisk Other fees may apply. There are costs associated with owning ETFs. To learn more about Merrill pricing, visit our Pricing page. Other fees and restrictions may apply. Although plans may set lower deferral limits, the most you can contribute to a plan under tax law rules is the lesser of:.

The year catch-up is separate from the age catch-up. See the b contribution limits and Publication , Tax-Sheltered Annuity Plans b Plans , for more information on b contributions and catch-ups. Although rare, your plan may limit the amount you can defer to an amount less than the allowed deferrals for that plan type for the year. A plan with a k feature may also reduce the amount you can defer to ensure that the plan meets nondiscrimination requirements.

See b Plan Contribution Limits.