There's no limit to the number of traditional individual retirement accounts (IRAs) you can set up. However, if you set up multiple IRAs, you can't contribute more than the contribution limits on all your accounts in any given year. Ultimately, the answer depends on your individual needs and retirement plans. For some, it may make sense to maintain multiple accounts, while for others it may be better to use a more direct route.
While a Roth IRA and a traditional IRA are similar, there are key differences you should understand when you start saving. The biggest difference between a traditional IRA and a Roth IRA is the way your contributions are taxed. For example, an employee has the freedom to simultaneously open a traditional IRA and a Roth IRA, or they can also choose to have several IRAs of either type. A traditional IRA offers the benefit of tax-deductible contributions, while a Roth IRA allows you to withdraw money tax-free during retirement.
Having a Roth IRA from which you can make tax-free withdrawals could help offset the taxable withdrawals associated with a traditional IRA. Combining different types of IRAs can help you diversify your investments more efficiently than if it were just one type of IRA, such as the traditional IRA or the Roth IRA. For example, a person who makes a living with two different jobs may want to manage both traditional IRAs and Roth IRAs depending on their situation, rather than bundling the two incomes together.