I've largely ignored dealing with my finances in the past, mostly because I really, really hate dealing with them, and as a result have made some poor decisions. I've been making good money but I've changed jobs a lot. As a result I had multiple 401Ks with some money in them, which I was advised to put into rollover IRA. I did this last year, but because of being clueless about investment, never invested this money. That money has sat, uninvested, for about a year.

Now that I've realized how stupid I've been, I have invested that money. Unfortunately, I also just realized that the maximum annual contribution for this IRA is 5500$ annually. I read that I should be able to contribute up to 18000$ to a 401K annually, but apparently this only applies to employer sponsored 401Ks? I also read that it may be possible to have multiple IRAs?

I realize that I will never get back the growth potential I've missed out on for the last 5 years.
My question is, since I've chosen a path where it makes sense to manage my own retirement savings,

  • How should I go about getting back on track?
  • Should I look at opening more IRAs and make the maximum contribution annually?
  • I also have money in savings that is un-invested, which I was considering using to buy some investments. What is the optimal way it could be put to good use for supplementing the IRA income?


  • Probably the most important aspect in saving for retirement is the part about saving money. It sounds like you have that taken care of, so you are mostly good. You obviously can't go back five years and change history, but you can do things differently from this moment on. I would however recommend against dumping a large lump sum into the market; it's almost always better to spread it out a little, to reduce the risk of happening to buy at a local price peak. Yes, the market might climb while you are buying; but it also might fall. Markets are funny like that.
    – user
    Mar 16, 2016 at 20:48
  • If you're self-employed, you can open a one-participant 401k.
    – mkennedy
    Mar 16, 2016 at 21:04

1 Answer 1


Here's what I would do:

  • You've already started by rolling all your 401Ks into a single IRA. If you haven't already, set a target asset allocation for all your investments, and buy index funds within that IRA to match that asset allocation.
  • There is no reason to have more than one IRA. Your maximum annual contribution limit for all IRAs is still $5500 total, not $5500 per IRA.
  • Make sure to keep enough money in savings to act as an emergency fund. With whatever is left, you can dump $5500/year into your IRA (according to your target asset allocation). If you want to invest the money faster than $5500/year, you can open a regular (taxable) brokerage account and buy index funds there according to the same asset allocation you used above.

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