Speaking of rollover IRAs

[whitestick]

I have an old traditional deductible IRA - been in existence for 20+ years. As I prepare for RE, I had always assumed that I could rollover the company 401k to that IRA and merge them together. Is that possible, without any tax implications. I prefer to keep the number of IRAs to a minimum, rather then keep two seperate, if possible. Is my assumption correct?

 

[eridanus]

There will be no tax implications.


http://www.irs.gov/taxtopics/tc413.html
http://www.irs.gov/faqs/faq-kw88.html (see 17.2)


One advantage to having >1 IRA is that you can do a SEPP on one and leave the other alone.

 

[BigMoneyJim]

If you have a separate rollover IRA with funds only from your 401(k) you can later roll it back into another company's 401(k). If you roll the funds into an existing non-rollover IRA then your funds are commingled and you can't roll it back into a 401(k) later.

However, at the moment I'm not convinced anyone would care unless you really want to use the loan feature of the 401(k) which is not generally recommended.

Does having multiple IRA affect RMDs at age 70?

As far as your question, I believe you can do that with no tax implications. Just thought I'd mention some other factors that may or may not be considerations for you.

 

[smileydog]

I have been researching the same question and have not found all my answers yet. If what you are saying holds true - I won't be able to roll my IRA into a 401k program due to taking a lump sum retirement from MegaCorp and rolling my old 401k balance into a single IRA. Just limits my choices a bit. My plan (today) is to work until 55 and do the 72t tango - if the market will cooperate a bit If anyone has any other options I should be investigating please chime in.

dog

 

[gindie]

If you have a separate rollover IRA with funds only from your 401(k) you can later roll it back into another company's 401(k). If you roll the funds into an existing non-rollover IRA then your funds are commingled and you can't roll it back into a 401(k) later.

Actually, I believe the comingling limitation in regards to not being able to roll it back into a 401K has gone away. I want to say it was in conjunction with Bush's first tax cut legislation, but it may have been earlier.

 

[eridanus]

Commingling has been allowed since 1/1/2002.

http://www.fool.com/money/allaboutiras/allaboutirasglossary.htm

 

[BigMoneyJim]

Wow. I've learned two things in this thread.

1 - Commingling is now allowed
2 - Commingling has two "M"s .... I wouldn't have thought that until the spell checker objected. Google confirms it.