Roll Over of 401K money into an existing rollover IRA account

[Al18]

Yes, you can rollover multiple 401K, pensions, etc into a single Rollover IRA. I don’t understand all the concerns about being sued - nobody in my extended family has ever been sued in their entire lives. I do have an umbrella insurance policy just in case.

 

[Texas Proud]

Wow... lots of replies quickly...

YES, you can roll it over to the same IRA

Your next question should be 'should I'?

Not sure about this but I think pension money has the same protection as a 401(k) so I do not see any problem having one account...

Now, I have some separate accounts so I can see what returns I get from 'that' money.... it really does not matter but it is interesting to me...

 

[Dash man]

Here’s some information from Investopedia that explains what accounts are protected from creditors:

Which Retirement Funds Are Protected From Creditors?

Your retirement funds may be protected from creditors, depending on the type of account and the state where you live.

www.investopedia.com

Under the Key Takeaways:
“Non-ERISA plans—such as traditional and Roth IRAs—typically do not have the same level of creditor protection, unless the funds were rolled over from an employer-sponsored plan, like a 401(k).”

 

[Sunset]

Yes, you can rollover multiple 401K, pensions, etc into a single Rollover IRA. I don’t understand all the concerns about being sued - nobody in my extended family has ever been sued in their entire lives. I do have an umbrella insurance policy just in case.

Sure it's rare, but if you are in a car accident and maim a couple of kids, they will sue for everything.

Nothing wrong with ensuring a person has a few hundred to a few million safe from even that possiblity, when it only requires a choice of account being made.

I've never had a house fire either, nor anyone I know in my personal life, but I still buy fire insurance.

 

[Al18]

That’s what car insurance and umbrella insurance is for.

 

[Car-Guy]

Yes, there is a good reason. 401K accounts have better protections against creditors and lawsuits than regular IRAs and an IRA rollover account retains those protections unless it is commingled with another IRA. My rollover account is labeled Rollover IRA as opposed to just IRA.

So, I've already taken my RMD and paid the tax from my 401k this year. If I now roll my entire 401k balance to a rollover IRA at my brokerage before year end 2024, how will my broker know that I've already taken my RMD from that money and paid the tax while it was in the 401k? I don't want them to tell me I now need to take another RMD in 2024 from the new rollover account. (If that makes sense)

 

[audreyh1]

So, I've already taken my RMD and paid the tax from my 401k this year. If I now roll my entire 401k balance to a rollover IRA at my brokerage before year end 2024, how will my broker know that I've already taken my RMD from that money and paid the tax while it was in the 401k? I don't want them to tell me I now need to take another RMD in 2024 from the new rollover account. (If that makes sense)

I think you tell them what you already did?

 

[Car-Guy]

I think you tell them what you already did?

Nothing is simple is it... I've sent the same question to my advisor at Schwab to see what he says. His "answer" will help me decided if I roll over the money now or wait until next year.

Thanks

 

[audreyh1]

I think if you wait till next year you may have to take your RMD again before rolling over? Check with your advisor.

 

[Car-Guy]

I think if you wait till next year you may have to take your RMD again before rolling over? Check with your advisor.

Will do - I should hear back from him Monday or Tuesday. Hope he has an iron clad/solid answer and not one of those, well it depends or maybe.... Hate those.

 

[Texas Proud]

They will send all info to the new broker so they will know that you took your RMD...

I am surprised that your guy does not know this...

 

[ncbill]

That’s what car insurance and umbrella insurance is for.

Unless you cause injuries so severe that the plaintiff won't settle within your insurance limits.

And then the insurance company tells you they want to pay out those limits but leave you on the hook for any excess judgment.

I have personally seen that happen in a case involving a business.

The business had to fire the insurance company's lawyers, hire outside counsel, and go to trial.

Where they won, but it was a years-long headache for them, with no guarantee they wouldn't be found liable.

An individual has the ability to avoid exposing any ERISA-protected account to the above nightmare just by opening a separate IRA account to receive the rollover.

Which is a simple matter, at least at any of the major brokerages.

 

[sengsational]

We hate to have to set up yet another accoun,t as he already has a standard Traditional, a Roth, and the Rollover, all containing various mutual funds, as well as a brokerage for the rollover.

I can identify with having too many accounts. Bond fund performance has been dismal compared to my SVF, so I'm suffering with the "extra account."

For me, I wouldn't worry about it...I'd just toss the 401K money in the same Rollover account and not bother with keeping it separate. I don't worry about these super narrow problems. I "get it" if that's someone's hobby, but it's not mine. Not that I don't have my share of things I spend way too much time thinking about, but this ain't one of them.

 

[Car-Guy]

They will send all info to the new broker so they will know that you took your RMD...

I am surprised that your guy does not know this...

I may have known this, but I'll claim old age for forgetting. Anyway, sending them such info would make "too much sense", so I'm checking.

 

[Badger]

If accounts are in a revocable trust and/or having beneficiaries would that protect from being sued?

 

[RetiredHappy]

If accounts are in a revocable trust and/or having beneficiaries would that protect from being sued?

You don't put IRAs into trusts.

Only irrevocable trusts that someone else's names are protected from losing the money in a lawsuit - like OJ Simpson where he placed his money in irrevocable trusts that go to his children.

Beneficiaries never come into play for IRAs and revocable trusts.

 

[Texas Proud]

I may have known this, but I'll claim old age for forgetting. Anyway, sending them such info would make "too much sense", so I'm checking.

LOL, I did not mean you should have known... but the rep from the brokerage firm should...

Then I see that you have not yet asked...

 

[Dalton]

Thanks. So I guess we will have to call the mutual fund company and set up a new rollover account specifically for the 401k funds.

I knew it couldn’t be so easy… Lol!

But... to answer the clarify, you certainly CAN comingle them into the same Rollover IRA. I did it with a couple small 401k balances to make my life simpler. Many people comingle them.

 

[Dalton]

So, I've already taken my RMD and paid the tax from my 401k this year. If I now roll my entire 401k balance to a rollover IRA at my brokerage before year end 2024, how will my broker know that I've already taken my RMD from that money and paid the tax while it was in the 401k? I don't want them to tell me I now need to take another RMD in 2024 from the new rollover account. (If that makes sense)

Your IRA broker doesn't care if you've taken your RMD. They will send you reminders to make sure you've taken your RMD, but for all they know you have IRAs at 10 different brokerages. Ultimately, it's your responsibility to take the RMD, and you will have to answer the questions on the 1040 when doing your taxes... "did you take and RMD?", "How much distribution did you take?", "how much was your RMD supposed to be?" (not the exact questions, but you get the gist)

 

[oldtimer]

So, I've already taken my RMD and paid the tax from my 401k this year. If I now roll my entire 401k balance to a rollover IRA at my brokerage before year end 2024, how will my broker know that I've already taken my RMD from that money and paid the tax while it was in the 401k? I don't want them to tell me I now need to take another RMD in 2024 from the new rollover account. (If that makes sense)

Your 2024 RMD for IRA is based on the account's balance back at the end of last year (Dec 31, 2023), before you rolled over your 401k.