IRA Rules

Posts Tagged ‘rules’

Question: If I convert my rollover & nondeductable IRAs to Roth, can I then comingle those with my existing Roth IRAs?

In my retirement account I have a Rollover IRA from a former employer, a Roth IRA, and also a traditional (nondeducted) IRA, all are in separate accounts — I understand that tax rules don’t allow comingling of funds with different rules (like Roth vs. Traditional.) If I convert my Rollover and traditional IRAs to Roth, then all the different accounts would be under the same rules. Will I then be able to combine/comingle those acconts, so all the funds are in one big account?

Answer: Yes. Once all your IRAs are converted to Roths, you can transfer them to another Roth of your choosing.

Self Directed IRA Custodian :: Real Estate IRA :: Rollover 401k

Question: If I covert my traditional IRA to a Roth IRA will I be affected by the 5 year rule regarding withdrawals?

Answer: Yes. Your contribution from the rollover will start the 5-year rule for withdrawals prior to 59 1/2. After 59 1/2 they go away.

However, do the math carefully.

If you are concerned about the 5 year rule a conversion may not make sense for you. The major reason to do it would be to not have to start withdrawals at 70 1/2 as is the case with a traditional IRA.

Roth IRA or Traditional IRA: How To Choose?