If you want a secure financial future, maxing out a tax-advantaged retirement account as early and as often as possible is the secret. But many people don’t realize you can have multiple retirement accounts. You can sock away even more money if you follow the rules for each type of account. 

Here will review the rules for contributing to multiple retirement accounts. You’ll learn how to qualify for different accounts and avoid mistakes.

How many workplace retirement accounts can you have?

Technically, there’s no limit on the number of retirement accounts you can have. However, there are strict contribution limits for each type—plus, one imposes an income limit, which I’ll review.

For 2023, workplace retirement plans, such as a 401(k) or 403(b), allow you to contribute up to $22,500 or $30,000 if you’re over 50. Typically, you can only have one active retirement plan per employer. 

But if you have multiple jobs that offer a 401(k), you could have one with each employer. However, the catch is that your total contributions can’t exceed the annual limit. 

If you’re lucky enough to have an employer that matches your contributions or pays profit sharing, the combined total limit for employee and employer contributions is $66,000 in 2023 or $73,500 if you’re over 50. 

Again, that total limit applies to all your employer-sponsored retirement plans when you have a boss padding your retirement account. And the limits apply whether you use a traditional or Roth account. 

In Money Girl episode 672, Laura reviews the critical differences between a Traditional and Roth 401(k). What should you consider and how they affect your current taxes and future retirement? Listen in the following player.

How many traditional IRAs can you have?

Anyone with earned income qualifies for a traditional IRA. However, high earners don’t qualify for a Roth IRA, and I’ll cover more about that in a moment. Again, there’s no limit on the number of IRAs you can own, just an annual contribution limit. 

For 2023, the IRA contribution limits are much lower than workplace plans at up to $6,500 or $7,500 if you’re over 50 and have that much income. That applies to both traditional and Roth IRAs. So, if you’re under 50 and earn at least $6,500, you could contribute $3,000 to a traditional IRA and $3,500 to a Roth IRA or any proportion you like that adds up to $6,500.

However, if you’re married and file a joint tax return and one of you has no income, the other spouse can max out both your IRAs. For instance, if you’re both under 50 and one spouse earns at least $13,000, both qualify to max out a traditional IRA, Roth IRA, or any combination.

In the Money Girl episode below, Laura reviews ways to calculate the retirement savings you need and exactly how much you should have by age to keep your goals on track. Listen in the following player.

Can you have multiple Roth IRAs?

I mentioned that Roth IRAs have an income limit for qualification. If your income is below the following thresholds for 2023, you can contribute to as many Roth IRAs as you like if you don’t exceed the total limit of $6,500 or $7,500 if you’re over 50. 

• Single taxpayers can’t contribute to a Roth IRA when their modified adjusted gross income (MAGI) is at or above $153,000. 
• Married taxpayers filing a joint return can’t contribute to a Roth IRA when their household MAGI is $228,000 or higher. 
• Married taxpayers filing separate returns can’t contribute to a Roth IRA when MAGI is $10,000 or higher.

In another Money Girl episode, 768, Laura covers three legit ways to have a Roth IRA–even if you’re technically ineligible because you earn too much–and why their tax-free benefits are so powerful for young owners and retirees. Listen in the player here: 

How many self-employed retirement accounts can you have?

You have several options to save for retirement when you’re self-employed with or without employees. In addition to a traditional IRA and Roth IRA (depending on your income), a couple of excellent options are a SEP-IRA and a solo 401(k). 

You can contribute to a SEP-IRA or Simplified Employee Pension if you have any size business with or without employees. But contributions only come from you as the employer; your employees can never contribute their own money. 

For 2023, you can make SEP-IRA contributions for each employee (including yourself) up to 25% of each employee’s compensation for a maximum of $66,000. There are no catch-up contributions allowed for SEP-IRA participants over 50.

ALSO READ: 4 Ways to Save for Retirement When You’re Self-Employed

What is a solo 401(k)?

A solo 401(k) is similar to a regular 401(k) offered by many employers, but it’s available when you’re self-employed and don’t have employees other than a spouse. You can make contributions as both an owner and employee of your business.

A solo 401(k) offers a high contribution limit, so it’s an excellent option when you have a high self-employment income and no employees other than a spouse. For 2023, you can contribute up to $66,000, or $73,500 if you’re over 50, to a solo 401(k).

In general, you can only use one self-employed retirement plan per business. However, if you have multiple companies or side gigs, you could have a SEP IRA for one and a solo 401(k) for another. That could make sense if one business has employees and the other doesn’t.

If you have one business with a SEP IRA and another with a solo 401(k), you could double your contributions limits if you have that much income. You could contribute up to $66,000 to the SEP and $66,000 or $73,500 if you’re over 50 to the solo 401(k). Your contribution limits for 2023 could be $132,000 ($66,000 + $66,000) or $139,500 ($66,000 + $73,500) if you’re over 50. 

Can you contribute to a 401(k) and an IRA in the same year?

A common retirement question is whether you can max out a plan at work and an IRA in the same year. The short answer is yes. However, If your income exceeds the following limits for 2023, some or all of your traditional IRA contributions may not be deductible.

• Single taxpayers get a full deduction when your MAGI is up to $73,000 and a partial deduction up to $83,000. You receive no deduction at or above $83,000. 
• Married taxpayers filing a joint return get a full deduction when your household MAGI is up to $116,000 and a partial deduction up to $136,000. You receive no deduction at or above $136,000. 
• Married taxpayers filing separate returns get a partial deduction when your MAGI is less than $10,000 and no deduction at or above $10,000.

In other words, if your income is below these thresholds for your tax filing status and you want to save more and get a tax deduction, contributing to a traditional workplace plan and a traditional IRA is a great option. 

Another option for married folks

Here’s another situation that affects married people. Let’s say your spouse works for a small company that doesn’t offer a retirement plan, and you’re covered by a 401(k). That also limits how much you can deduct for traditional IRA contributions based on household income.

If you’re not covered by a retirement plan at work, but your spouse is, here are the rules for 2023:

• Married taxpayers filing joint returns get a full deduction when household MAGI is up to $218,000 and a partial deduction up to $228,000. You receive no deduction at or above $228,000. 
• Married taxpayers filing separate returns get a partial deduction when your MAGI is less than $10,000 and no deduction at or above $10,000.

Due to these restrictions, consider using a Roth IRA (if your income allows it), which is never deductible and doesn’t conflict with having a workplace retirement plan. But if your income is too high to qualify for a Roth IRA, your only option is to make non-deductible traditional IRA contributions. To help with the recordkeeping, you must file IRS Form 8606, Nondeductible IRAs.

While you won’t get an immediate tax benefit for non-deductible IRA contributions, your investment gains are tax-deferred until you make withdrawals in retirement, which is still a terrific benefit not to overlook.