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Is there a maximum amount you should have in an IRA?

If you have an IRA with $200,000 or $300,000 in it, should you open a new one or just keep adding more money to the single large account. I thought there might be benefits to having multiple accounts to draw on if there is a financial crisis or if the financial institution was to run into trouble. I am not sure if IRAs are covered by any insurance or not.

Any information on this would be helpful. I have looked on the web and have not seen anything on this.

Thanks,

Rodeslyn
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Hello Rodeslyn:
Is there a maximum amount you should have in an IRA?

If you have an IRA with $200,000 or $300,000 in it, should you open a new one or just keep adding more money to the single large account.


No, it shouldn't matter how much one accumulates in an IRA account. Hopefully, you've chosen a custodian for this account that you researched and discovered they had a successful track record and a relatively long history of quality service that will allow them to keep their current customers, as well as attract new ones. Although one can't really be 100 certain, you should be fairly certain after doing your due dilligence. IMHO, your asset allocation (what percentage between different assets you split your money into) should be more important.

Some investors have two or more IRAs because each brokerage house does some things better than others, like options, lower costs for limit orders, some are more condusive to those who trade more frequently, etc.

HTH

Bookm
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If you have an IRA with $200,000 or $300,000 in it, should you open a new one or just keep adding more money to the single large account.

If your IRA is with a bank or other FDIC-insured institution, FDIC insurance is capped at $100,000 per depositor, so if the bank goes belly-up, you are guaranteed to keep only $100K.

I don't believe the same issue applies to brokerage accounts, since brokers aren't covered by FDIC. I believe most brokers are insured with SIPC, which works differently and has a higher limit.

JDOyster
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If you have an IRA with $200,000 or $300,000 in it, should you open a new one or just keep adding more money to the single large account.

It may be worth breaking up between institutions if you hit the limit of the insurance for that institution ($100,000/depositor for FDIC or NCUA insured institutions, much higher for SPIC-insured institutions). Or it may make sense to break it up to pick the most appropriate custodians, e.g., a discount broker where you buy and sell individual stocks, a fund family if you have mutual funds in a specific fund family, depending on your investment plan and the instruments that best fulfill that plan.

Personally, I prefer having my assets at several different institutions. So in my case, my pension is at one organization (actually, I have no choice in this, but I lucked out on a very good pension plan!), my 403(b) is at another institution, my taxable investments and Roth IRA are at a third, and my checking and emergency fund are at a fourth. My thinking is that if there is something that happens that makes my assets inaccessable at one institution, I will probably be able to use assets from another while the problem with the first is being resolved.
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