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06-12-2007, 06:50 PM
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#1
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Give me a museum and I'll fill it. (Picasso)
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Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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Traditional IRA Question
Once you are past 59 1/2 is there any reason not to consolidate all traditional IRAs into one?
I have one fairly large one, and a much smaller one. It seems that it might be easier to manage if it were all together.
Ha
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06-12-2007, 07:44 PM
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#2
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Thinks s/he gets paid by the post
Join Date: Jul 2003
Location: Pasadena CA
Posts: 3,302
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I did that before 59.5. For the same reasons, a large one and two small ones. Now one Target Retirement type fund.
__________________
T.S. Eliot:
Old men ought to be explorers
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06-12-2007, 07:50 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Feb 2006
Posts: 1,183
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There are a couple of reasons...
Bankruptcy creditor protection limit (rule of thumb) is 1M per account.
Also, nice to have a smaller one as a safety net if the big boy gets beat up too much by the markets. Just a way of keeping a rainy day fund so to speak.
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06-12-2007, 07:51 PM
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#4
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Moderator Emeritus
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
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Can't see any reason why you wouldn't consolidating. Sure makes the book work and monitoring alot easier.
The trick is to find one IRA company that combines all your asset allocations with competitive performance and expenses. I chose vanguard, but will keep my REITs in TIAA-CREF (just a token part of my assets).
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.
As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
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06-12-2007, 07:58 PM
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#5
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
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Both of mine are at Fidelity in brokerage accounts. At present they are largely invested in short term govts and TIPS, plus a few index puts. When I might consider a mutual fund, I tend to use ETFs
Ha
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06-12-2007, 09:14 PM
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#6
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Moderator Emeritus
Join Date: Dec 2002
Location: Oahu
Posts: 26,853
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 Quote:
Originally Posted by haha
Once you are past 59 1/2 is there any reason not to consolidate all traditional IRAs into one?
I have one fairly large one, and a much smaller one. It seems that it might be easier to manage if it were all together.
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I don't know, but Ed Slott might have written about it in one of his books. You might also want to post your question on his discussion board, where several published CPAs make it their life's mission to give detailed answers to questions like that.
It's possible for IRAs to have a cost basis from non-deductible contributions or 401(k) after-tax contributions. IIRC when you combine the two you'll have to keep track of the cost basis, which might complicate paperwork or tracking.
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06-13-2007, 08:15 AM
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#7
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Moderator Emeritus
Join Date: Feb 2004
Location: minnesota
Posts: 13,228
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Bankruptcy protection isn't one million per account, it is total for all IRA accounts in your name. And including both traditional and Roth accounts.
__________________
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No more lawyer stuff, no more political stuff, so no more CYA
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06-13-2007, 11:54 AM
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#8
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Recycles dryer sheets
Join Date: May 2007
Posts: 107
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Quote:
Originally Posted by Nords
I don't know, but Ed Slott might have written about it in one of his books. You might also want to post your question on his discussion board, where several published CPAs make it their life's mission to give detailed answers to questions like that. |
I like the IRA Help Forum also !
I have used it a few times and gotten very good quality replies.
I also like Ed Slott's book The Retirement Time Bomb ... and How to Defuse It ! Well worth the money !
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06-13-2007, 12:26 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,391
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Quote:
Originally Posted by Martha
Bankruptcy protection isn't one million per account, it is total for all IRA accounts in your name. And including both traditional and Roth accounts.
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In some states, Rollover IRA's (from 401k's etc.) have unlimited bankruptcy protection. So based on that you may not want to combine rollover IRA's with other IRA's.
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06-13-2007, 12:31 PM
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#10
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Moderator Emeritus
Join Date: Feb 2004
Location: minnesota
Posts: 13,228
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MasterBlaster, you are absolutely right. I simply forgot. It is a matter of federal bankruptcy law that rollover IRAs from qualified plans like 401ks have unlimited bankruptcy protection. Sorry for the ommission.
__________________
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No more lawyer stuff, no more political stuff, so no more CYA
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06-13-2007, 09:31 PM
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#11
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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I appreciate all these comments. Thanks!
Ha
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06-14-2007, 05:59 AM
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#12
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Thinks s/he gets paid by the post
Join Date: Sep 2006
Posts: 1,682
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Quote:
Originally Posted by Martha
MasterBlaster, you are absolutely right. I simply forgot. It is a matter of federal bankruptcy law that rollover IRAs from qualified plans like 401ks have unlimited bankruptcy protection. Sorry for the ommission.
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Is it just bankruptcy protection, or protection from lawsuits in general?
TJ
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06-14-2007, 01:39 PM
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#13
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Moderator Emeritus
Join Date: Feb 2004
Location: minnesota
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It is just bankruptcy protection. If you don't file bankruptcy then state law governs the extent money in an IRA is exempt from creditors. States are all over the board on how they deal with IRAs. Some have unlimited exemptions. Some limit it by a certain dollar amount. Others provide that money in IRAs are exempt to the extent reasonable necessary for a debtor's support.
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No more lawyer stuff, no more political stuff, so no more CYA
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06-14-2007, 01:47 PM
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#14
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Thinks s/he gets paid by the post
Join Date: Sep 2006
Posts: 1,682
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Quote:
Originally Posted by Martha
It is just bankruptcy protection. If you don't file bankruptcy then state law governs the extent money in an IRA is exempt from creditors. States are all over the board on how they deal with IRAs. Some have unlimited exemptions. Some limit it by a certain dollar amount. Others provide that money in IRAs are exempt to the extent reasonable necessary for a debtor's support.
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So, if sued, a prudent person might want to file for Chapter 11, thereby
protecting their assets in ERISA governed accounts.
TJ
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06-14-2007, 02:10 PM
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#15
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Moderator Emeritus
Join Date: Feb 2004
Location: minnesota
Posts: 13,228
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Chapter 7 or 13 would be what you would want to file. Chapter 11 is primarily for businesses.
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No more lawyer stuff, no more political stuff, so no more CYA
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