Dec 18

I have a 401k with my job and a Roth IRA. I’m planning to leave my job soon (for school) so can I rollover my 401 into the current Roth IRA since it would be less than the annual contribution limit (about $2500). Or do I have to open a “Rollover IRA” and then maintain two separate IRA accounts?

4 comments so far...

  • tempting_butnothanks Said on December 19th, 2009 at 12:29 am:

    you may have to maintain separate accounts. the traditional IRA hasn’t been taxed, while the Roth has. you can’t mix those apples & oranges.

  • Jed C Said on December 19th, 2009 at 1:00 am:

    If you call the brokerage that holds your roth IRA, they would know for sure whether or not tax penalties would be imposed by rolling over a 401k to a roth.

    I have rolled over my employers 401k to a 401k rollover account with my brokerage. I did not imcur any tax penalties and I can now buy the stocks and mutual funds of my choice instead of the limited option included in my employers 401k company.

  • americanfreeman Said on December 19th, 2009 at 1:42 am:

    guy above is correct. Once it is in a traditional IRA, you can convert to the Roth. (and pay the tax)

  • bud68 Said on December 19th, 2009 at 2:36 am:

    No, you cannot directly roll a 401(k) into a Roth. Set up a (conventional) rollover IRA. In 2010, a tax “window” will open to convert it to the Roth if you so choose.

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