Various sources/types of IRA accounts - OK to combine?

[stephenson]

Hi All,

Continuing my effort to simplify ...

I have three different IRA sourcing accounts at Vanguard:

1. Traditional IRA Brokerage
2. Rollover IRA
3. Rollover IRA Brokerage

Is there an issue to blending the three other than not being able to transfer the employer component piece back into another employer plan?

Keeping them separate is a PITA for asset allocation and rebalancing ...

Thanks!!

 

[2017ish]

If you are close to or above 1.2 million in the IRAs, you might want to keep the traditional separate from the rollovers. Bankruptcy exemption is unlimited for rollovers, but has a cap for Traditional. Easier not to have to disentangle in the event of bankruptcy. https://www.irahelp.com/slottreport/your-ira-protected-creditors-you-may-be-surprised

In any event, I'd combine the two rollover accounts.

 

[TrophyWife]

I recently read this ...

on Our Next Life (an Early retirement blog). I had never thought about funds being protected from a judgement...

Protecting Retirment funds- impact of rolling funds into a previously established IRA vs. a separate and distinct IRA.


If rolling over money out of employer fund-move them into separate identifiable (vanguard) funds. This keeps them protected from creditors/judgements. If we have years in retirement when we earn enough that we can sock money away extra money in an IRA, we’ll make sure we have separate accounts set up so there’s never any mixing or matching. Our 401(k) funds will (we hope) continue to grow once we roll them over, but we won’t add to them so that we kept their “employer-sponsored” nature intact for liability protection. (P.S. That’s another great reason not to convert all those funds over through backdoor Roths — once that stuff is modified or converted, it’s no longer protected, or at least you can’t ensure that it is.)