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I'm interested in starting a new brokerage account somewhere. I would like to "test the waters" before transferring my entire IRA to them. Is there any law against having a completely separate IRA account? Of course, I plan on staying below the annual contribution limits for the sum added to both accounts.

I'm planning on keeping them the same type so I can easily combine them later. On the other hand, I'm also tempted to make one Roth and the other Traditional so I can diversify..my calculations show that neither type is superior for my situation. Do I even have the option of having both types?

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2 Answers 2

Yes, your IRAs are separated into two kinds, Traditional and Roth. Each of the two may be divided into as many individual accounts as you wish.

The choice between traditional or Roth really depends on many factors. Some should clearly use one vs the other, some a mix of both. If you want to continue that aspect of the discussion, come back with more specifics, and we can offer better details.

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I have both a traditional and a roth. They happen to be at the same brokerage, but so long as you stay under the maximum contributions for all the accounts you are fine.

The reason I have both is I did a rollover from an employer to my own account, and I could only roll into a traditional; not my existing roth. I still have both because there will be an early withdrawal penalty if I merge them.

If you don't want to have both knids for the long term, don't start both kinds. Make sure if you start two roths that you can easily roll one into the other. Consult specifically with however has the account. My understanding from other questions on basicallymoney.com is that the rules have changed (or will changed) so find out what is possible now from a subject matter expert.

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