Good question!

Easy answer! "Yes!"

But we don't want to leave it at that. Although it's true that there is no limit on the number of IRAs a person with earned income can have, common sense should compel you to put some limits around the matter. (There is of course the $2,000 cap on how much you can put in all your IRAs in one year.)

THE ADVANTAGES

Diversification
Having several IRAs in different places -- such as at a bank, with a brokerage firm and with a mutual fund company -- provides you with the protection that always comes with diversification. So that's one very good reason to have several.

The two types of IRAs
And, of course, you or your accountant may have decided it's to your advantage to have both a traditional and a Roth IRA.

THE DISADVANTAGES

Paperwork Problems
On the other hand, it's a given that maintaining a handful of IRAs is bookkeeping mess. And, it means you'll have extra monthly or quarterly statements to review. So unless you like to crunch numbers or you don't feel guilty asking your accountant to do so, think twice about opening up more than a couple.

Fees
Then there's the matter of the cost involved. Custodians typically charge custodial fees on IRAs held at mutual funds and brokerage firms. They range anywhere from $25 to $100 a year -- probably more, although $100 is the highest I've encountered. It's okay to pay for two, possibly three accounts each year, but above that, the fees could start to chip away at the profits you're hopefully raking in.

Distribution of funds
Numerous IRAs also complicate calculating the Required Minimum Distribution (RMD) which kicks in on traditional IRAs at age 70 1/2.

Compound Interest
If you've invested your IRA conservatively, say in a mutual money market mutual fund, then it's obviously to your advantage to have all that money in just one account so you can benefit from having your interest earn interest on a higher dollar amount.

ABOUT YOUR ACCOUNT...

I thought perhaps you asked this question because one of your IRAs is not doing so well. If that's the case, consider transferring it into one that you're pleased with. But do so very carefully: be sure you have this transfer done from custodian to custodian so you don't get socked with a tax bill -- in other words, don't cash out one IRA, accept a check made out to you and deposit it in another IRA. That's courting IRS disaster.

Actually, this being the IRS, there is an exception to what I just wrote, but it's a bit tricky and you need to be very self-disciplined to make it work correctly: If you take the distribution with the intention of rolling it into a different IRA, you have 60 days from the time you receive the distribution to deposit it into a different IRA. If you miss that deadline, you'll wind up owing income tax and possibly a 10% penalty because it will be regarded as an early distribution. I say "possibly a 10% penalty" because naturally, there are several exceptions to this statement as well -- you may not have to pay a penalty if, for example, you're over age 59 1/2. But the rules are complicated and you're playing with fire here, so, please -- stick with a custodian-to-custodian transfer.

A WORD OF CAUTION...

If you have your IRA in a bank account, read on. You want to make certain all your money is fully FDIC-insured. The current rule is that IRAs and Keoghs are insured separately from non-retirement bank accounts. That's the good news.

However, IRAs and Keoghs are ADDED TOGETHER and the combined total is insured up to $100,000. So keep track of how much your IRAs and Keoghs are worth at all times.

There's a nice, clear explanation of FDIC coverage at: www.fdic.gov. Click on: "Are My Deposits Insured?" and "Retirement Accounts." You should actually read this information whether or not you have your IRA parked with a bank because the rulings impact on savings accounts, CDs and other bank funds.

BOTTOM LINE:

Regardless of how many IRAs you decide to have, be certain to fund them to the max each year. It's a great way to save for retirement in a tax advantage account!

GOOD LUCK!