Can I have Roth IRA's with two different companies?

Question

For example, can I have a Roth IRA at both T.Rowe Price and Vanguard provided that I do not exceed the $4000 total annual limit for Roth IRA contributions. Or is it not allowable to have a Roth IRA at more than one company, therefore forcing me to rollover one of the IRA's into the other?

Answer 1

Yes, I believe you can split your cap between the two companies.

The only problem you may have is paying too much in fees that way.

Read the prospectus thoroughly as you don't want to end up paying out all your annual gains in annual fees. That would suck.

Answer 2

Yes. As long as you do not go over the $4000 total contribution for any tax year, the IRS does not care where you put it. However most companies do have custodial fees for low balance accounts (for example both Vanguard and T.Rowe Price charge $10 annually for IRAs with less than $5000) So it is best to consolidate those accounts to save money, and also make it easier to manage. Now for the decision on which company to choose. Vanguard has the lowest fund costs (lowest expense ratios) in the industry. They are client owned, (the funds own the company) so the expense ratio is only used to pay salaries of employees, and other management expenses. T. Rowe is also a low cost provider, but are publically owned, and spend a lot of money on advertising to attract investors for the funds as well as the company itself, which costs the funds money that could be better spent. My recommendation- consolidate with Vanguard.

Answer 3

You can put the annual contribution any where you want to. There is no government rule limiting where you put your money. The only problem I see is that you go with too many investment companies you could lose track of one of them. Plus by spreading out too much it becomes more difficult to manage the portfolio.