Yes, you can hold both a Roth IRA and a traditional IRA at the same time

The IRS allows you to own both account types simultaneously. There is no rule against having them open together. However, your total annual contributions across both accounts cannot exceed the yearly limit set by the IRS — you do not get to contribute the full amount to each one.

The limit applies to the combined total you put into all IRAs you own in a single tax year. For 2024, that limit is $7,000 if you are under 50, or $8,000 if you are 50 or older. If you contribute $4,000 to a Roth IRA, you can contribute only $3,000 to a traditional IRA that same year, not another $7,000.

This combined limit resets each January 1st. Contributions you made in prior years do not count against the current year's limit — only money you put in during the current tax year matters.

Key Takeaways

  • You can own a Roth IRA and a traditional IRA at the same time, but your contributions to both combined cannot exceed $7,000 per year (or $8,000 if you are 50 or older).
  • The contribution limit is shared across all IRAs you own, regardless of how many accounts you have open.
  • You can withdraw from a Roth IRA and a traditional IRA in the same year without penalty, but the tax treatment of each withdrawal differs based on the account type.
  • If you have a traditional IRA and want to open a Roth IRA, you may face income limits on Roth contributions depending on your filing status and modified adjusted gross income.

How the contribution limit works when you have both accounts

The IRS treats all your IRAs as one pool for contribution purposes. This means if you have two Roth IRAs and one traditional IRA, the $7,000 annual limit applies to the total of all three combined, not to each account separately.

You decide how to split the money between accounts. You could put $3,500 in a Roth and $3,500 in a traditional IRA. You could put $7,000 in one Roth and nothing in the traditional. You could split it three ways across multiple accounts. The only rule is that the total cannot exceed the annual limit.

If you exceed the limit, the IRS charges a 6% excise tax on the excess amount each year it remains in the account. You can correct an overcontribution by withdrawing the excess plus any earnings it generated before your tax return important date (including extensions).

Income limits for Roth contributions when you also have a traditional IRA

Having a traditional IRA does not directly block you from opening a Roth IRA. However, your ability to contribute to a Roth depends on your modified adjusted gross income (MAGI) and filing status. These limits are separate from the contribution limit itself.

For 2024, if you file as single, your Roth contribution phases out between $146,000 and $161,000 of MAGI. If you file as married filing jointly, the range is $230,000 to $240,000. If your income falls above these ranges, you cannot contribute to a Roth IRA that year, even if you have not used your full $7,000 limit.

A traditional IRA has no income limit for contributions, but if you or your spouse has a workplace retirement plan (like a 401(k)), the tax deduction for traditional IRA contributions may phase out. This is separate from the Roth income limit and depends on your income and whether you have access to an employer plan.

Tax treatment when you withdraw from both accounts

Withdrawals from a Roth IRA and a traditional IRA are taxed differently, even if you take money from both in the same year. A Roth withdrawal of contributions (the money you put in) comes out tax-free. A traditional IRA withdrawal is taxed as ordinary income in the year you take it.

If you withdraw earnings from a Roth IRA before age 59½ and before the account has been open for five years, you may owe income tax and a 10% early withdrawal penalty on the earnings portion. Contributions can always come out penalty-free. A traditional IRA withdrawal before age 59½ is subject to the 10% early withdrawal penalty on the entire amount, unless an exception applies.

The IRS has a rule called the pro-rata rule that affects traditional IRA withdrawals if you have both pre-tax and after-tax money in traditional IRAs. If you have a mix of deductible and non-deductible contributions across all your traditional IRAs, a withdrawal is treated as coming proportionally from both. This can create a tax bill even if you intended to withdraw only non-deductible contributions. A Roth IRA is not affected by this rule.

Reasons people hold both account types

Some people contribute to a traditional IRA for the when ready tax deduction, then convert part of it to a Roth IRA in a later year when their income is lower. This is called a backdoor Roth conversion and is a legal strategy, though it triggers the pro-rata rule if you have other traditional IRA balances.

Others max out a workplace 401(k) and then open an IRA for additional retirement savings. If their income is too high for a Roth contribution, they may open a traditional IRA and later convert it. If their income allows a Roth contribution, they might keep both to diversify their tax treatment in retirement.

Some people inherit an IRA from a spouse and keep it separate from their own IRA. Some open a second IRA at a different financial institution to keep investments organized. The IRS does not restrict the number of IRAs you can own — only the total amount you can contribute each year.

What happens at age 70½ and beyond

If you have a traditional IRA, you must begin taking required minimum distributions (RMDs) starting the year you turn 73 (as of 2023; this age was raised from 72 under the find 2.0 Act). The RMD is calculated based on your account balance and life expectancy. You must take it whether or not you need the money.

A Roth IRA has no RMD requirement during your lifetime. You can leave the money untouched as long as you live. This is one reason some people prefer Roth accounts for long-term wealth building.

If you have both a traditional IRA and a Roth IRA, the RMD applies only to the traditional IRA. You calculate the RMD based on the total balance of all your traditional IRAs, but you can take the distribution from any one of them. The Roth IRA balance does not factor into the calculation and does not require a distribution.

Frequently Asked Questions

If I contribute to a traditional IRA, does that reduce how much I can contribute to a Roth IRA?

Yes. The $7,000 annual limit (or $8,000 if you are 50 or older) applies to your total contributions across all IRAs. If you contribute $5,000 to a traditional IRA, you can contribute only $2,000 to a Roth IRA that same year. The limit resets on January 1st each year.

Can I have a Roth IRA and a traditional IRA with the same financial institution?

Yes. Many banks and investment firms allow you to open multiple IRAs with them. You can have a Roth and a traditional IRA at the same place, or spread them across different institutions. The IRS only cares about the combined total you contribute each year, not where the accounts are held.

What is the pro-rata rule and how does it affect me if I have both account types?

The pro-rata rule applies only to traditional IRAs. If you have both deductible (pre-tax) and non-deductible (after-tax) contributions across all your traditional IRAs, any withdrawal is treated as coming proportionally from both. This can create a tax bill even if you withdraw only non-deductible money. A Roth IRA is not subject to this rule.

Do I file separate tax forms for a Roth IRA and a traditional IRA?

You report both on the same Form 1040 tax return, but on different lines. Contributions to a deductible traditional IRA go on Schedule 1. Roth contributions are reported on Form 8606 if you have any non-deductible traditional IRA contributions. Your financial institution sends you a Form 5498 for each IRA showing what you contributed that year.

If I convert a traditional IRA to a Roth, does that count against my annual contribution limit?

No. A conversion is not a contribution. The $7,000 annual limit applies only to new money you add to IRAs. A conversion moves money from a traditional IRA to a Roth IRA and does not use up any of your contribution room. However, a conversion is a taxable event — you owe income tax on the amount converted in that tax year.