Can You Have Two Retirement Plans?

Saving money in a retirement account can yield tax savings to help you build wealth for retirement, but benefits vary from one type of plan to another. You can own two or more retirement plans, whether they are employer-provided plans or individual retirement accounts. Having multiple plans can let you take advantage of the specific benefits that different accounts offer and boost your total retirement savings.

401(k) Plans

A 401(k) plan is a common type of retirement account that employers can offer as a job benefit. When you contribute to a 401(k) plan and then take a new job, you may have the option of keeping your old 401(k) plan with your previous employer. If your new employer also has a 401(k), you could end up with two 401(k) plans. There is no limit to the number of plans you can have, so workers who switch jobs frequently can have several accounts with different employers.

Individual Retirement Accounts

Individual retirement accounts are plans you open on your own with a financial company like a bank stock brokerage. You can open as many IRAs as you want, but you have to adhere to annual contribution limits set by the government. According to the Internal Revenue Service, you can contribute $5,000 to IRAs if you are under 50 and $6,000 if you are 50 or older for the 2012 tax year. Contribution limits for IRAs are set to increase by $500 in 2013.


Keeping a 401(k) plan with an old employer can reduce your investment options, since you typically have to choose from a limited selection of investments offered by the plan. You can convert or roll over an old 401(k) plan into a new or existing IRA, which gives you more control over how you invest IRA funds. In some cases, you can roll over the balance from an old account into a plan offered by your current employer.

IRA Deduction

Contributions you make to a traditional IRA are normally tax deductible, but they may not be deductible if you have access to a retirement plan at work. If you have access to an employer-offered plan, you can only deduct the full amount of your IRA contributions if your adjusted gross income is under $58,000 as a single taxpayer or $92,000 as a joint filer.