One of the most important features of an individual retirement account (IRA) is just what the name implies: It's designed for individuals. You can customize your investments as you see fit and take withdrawals whenever you like. You can even control what happens to your IRA after you die. Nine other important features can help you make the most of what an IRA has to offer.

1. You Can Have More Than One IRA

It's possible to end up with more than one IRA for several reasons:

• You may have had an existing Roth IRA then you rolled a 401(k) into a traditional IRA.
• Your adjusted gross income (AGI) rose to the point where you were no longer eligible to contribute to your Roth IRA so you opened a traditional IRA instead.
• You inherited an IRA and you already had one of your own.
• You maintained your Roth IRA and opened a traditional IRA to take advantage of the different tax advantages.

You can contribute to as many IRAs as you like but the total amount you can contribute to all of them is limited to an annual maximum that's allowed by the Internal Revenue Service (IRS). The annual maximum contribution for 2023 was $6,500, or $7,500 if you'd reached age 50. That limit rises to $7,000 in 2024 or $8,000 if you've reached age 50.

If an individual who is age 42 deposits $2,000 into their traditional IRA in March 2024, they can then contribute no more than $5,000 to their Roth account in the same year. Keep in mind that Roth IRAs have phase-out eligibility rules based on income. The amount you can contribute may also be limited by how much you earn.

2. Contributions to Traditional IRAs Must Be in Cash

Contribution to your IRA for the year must be in cash. This limitation does not apply to securities that are rolled over because these must generally be rolled over in kind.

3. You Don’t Have to Take RMDs From All Your IRAs

Owners of traditional IRAs must begin taking required minimum distributions (RMD) by April 1 of the year after they reach age 73. The minimum amount required is determined by the balance of an IRA on Dec. 31 of the previous year plus the owner’s life expectancy. The RMD must be withdrawn in each year thereafter.

You don’t have to take RMDs from all of them if you have multiple IRAs. You can combine all the RMD amounts for each of your IRAs and take the total from one IRA or a combination of IRAs. You may prefer to liquidate certain investments in one IRA over the investments in another.

4. Different Rules Govern Spousal and Non-Spousal Beneficiaries

One of the benefits of owning an IRA is the ability to transfer funds directly to beneficiaries without going through probate.

Spousal Beneficiaries

Spousal beneficiaries can claim inherited IRAs as their own, a flexibility that allows a spouse to make new contributions to the inherited IRA and to control distributions.

“A spouse has lots of options when they inherit an IRA,” says , CFP®, CDFA, director of financial planning at Inscription Capital LLC, Houston. “They can make it their own IRA or a beneficiary-designated IRA. The latter would occur if the spouse is under age 59½ and needs to take out money for whatever reason. A beneficiary account would avoid the 10% penalty owed on IRA distributions to owners who are under age 59½.”

Non-Spousal Beneficiaries

Non-spousal designated beneficiaries cannot treat inherited IRAs as their own. They can’t add to them and they must completely liquidate an account within 10 years of the death of the owner if the owner died after 2019. Non-spousal eligible designated beneficiaries are categorized differently by the IRS and they have more flexible distribution options.

The distribution options available generally depend on the age at which the IRA owner dies. Keep this in mind if you plan to leave IRA assets to your children or grandchildren.

5. You Can Transfer or Roll Over Your IRA

Sometimes people want to move their IRA accounts from one financial institution to another. You can move the assets as a transfer or a rollover if you decide to maintain the same type of IRA account with a different company.

Transfer the Account

The assets are delivered directly from one financial institution to the other with a transfer. The transactions are not reported to the IRS.

“When moving funds in your IRA, you may do a direct transfer from one financial institution to another any number of times a year. Be aware that each firm may have its own account setup and close-out fees as well as an annual fee, so be aware of these charges when making firm changes,” says Rebecca Dawson, a financial advisor in Los Angeles.

Roll Over the Account

A rollover involves taking a distribution of the assets to yourself and rolling over the amount within 60 days.

“When a group retirement plan such as a 401(k) is rolled into an IRA, if the rollover is done the correct way, it can preserve some of the 401(k) plan benefits," says , principal at Innovative Advisory Group in Lexington, Massachusetts. "This is why it can make sense to roll the 401(k) into a rollover IRA rather than a contributory IRA.”

You may also be able to go in the other direction and roll your IRA assets over to a 401(k) plan. The plan must allow it, however, and would determine whether the rollover can be done as a 60-day rollover or if the funds must be paid directly to the plan.

One reason to do this is to shelter those IRA assets from RMDs. Funds in the 401(k) where you currently work aren't subject to RMDs when you reach age 73 but money in a traditional IRA will be. Don't pay taxes on the money if you don't have to withdraw it for living expenses. Check with a tax advisor to make sure you've done the transfer in time according to IRS regulations.

6. Your IRA Can Be an Annuity

An annuity can operate under the same rules as an IRA if the funding vehicle is an individual retirement annuity. One benefit is that annuity policies were designed to provide retirement income for life.

7. IRAs Can Be Managed Accounts

Here's an option if you have a lot of money in your IRA and want help managing it. Brokerage accounts let you give your financial advisor written authorization to make investment decisions and routine transactions without notifying you first. This type of activity is allowed for IRAs as long as your broker has an agreement with you to allow such actions. A flat fee is often charged for managing the account.

“I’m a real advocate for professional management of large IRA accounts. A quality investment advisor can build a low-cost custom portfolio and monitor it for necessary changes," says Dan Danford, CFP®, founder and chief executive officer at the Family Investment Center in St. Joseph, Missouri. "They can draw upon thousands of proven investment options and adjust for changes in your situation, product innovations, or changes in the economy."

Danford adds, "As a professional, I worry when retirees have a large portfolio and seek to save money by going it alone. I’ve seen bad results too many times. For most people, it’s penny-wise and pound-foolish.”

8. Investment Options May Be Limited

The IRS limits the types of investments that can be held in an IRA. Your financial institution may have asset restrictions as well. The IRS allows some gold and silver coins but most financial institutions do not. Similarly, some mutual fund companies don't allow individual stocks to be held in their IRAs.

9. Children Can Open IRAs, Too

Anyone of any age who is paid a salary, tips, or hourly wages for their work can contribute to a traditional IRA, including minors. Your child can start saving for retirement as soon as they get their first job. An IRA is an excellent option for kids because it allows for long-term, tax-deferred savings. It also teaches your children the value of investing at an early age.

“When you start investing outweighs how much you invest,” says , CFP®, CDFA™, a financial coach based in Anthem, Arizona. “If you have earned income, starting an IRA as a teenager, preferably a Roth IRA, is an excellent idea. It can have a significant impact on your retirement savings by harnessing the power of compounding interest.”

The tax penalty for early distributions will encourage your kids to defer taking distributions from the IRA but they can use the funds for college if need be or put up to $10,000 toward their first home without penalty.

They can continue to contribute to Roth IRA accounts as long as they have earned income. This is an excellent account for money that will eventually pass as an inheritance.

There are no longer age limits on making contributions to traditional IRAs. You couldn't make IRA contributions to traditional IRAs after the age of 70½ before the passage of the 2019 SECURE Act. Contributions can now be made at any age as long as an individual has earned income.

The Bottom Line

IRAs have built-in flexibility. Understanding how the various features work can help you tailor your retirement savings efforts to meet your needs. Research the best brokers for IRAs if you're looking for more information about where to start.

Correction—Dec. 8, 2021: A previous version of this article stated that IRA losses are deductible. IRA losses were made nondeductible by the Tax Cuts and Jobs Act.

Correction—Feb. 6, 2024: A previous version of this article stated that the IRA contribution limit rose to $7,000 in 2023. The limit increased to $7,000 in 2024.