Rollover Ira Or Roth Ira
November 25th, 2006
Question: IRA vs. IRA CD? How to Rollover IRA and 401K money…?
I have an IRA that was rolled over from a 401K a few years ago. I also have money vested in my last company’s 401K plan in which I was vested 50/50 in a traditional and roth.
I am trying to roll over all of IRA/ 401K money into one IRA, but don’t know which way to go. What’s the difference between an IRA and IRA CD? Is it better to go traditional IRA or roth? Also, I was told some banks may not take my roth money, and idea why this would be?
(I’m late 20′s with less than 5K to invest)
Answer: Your old rollover IRA can be transferred to a new IRA custodian as you wish and invested in whatever you wish – that is referred to simply as a transfer between custodians.
There is no such thing as an “IRA CD” – you must mean an IRA that is invested in CDs.
You can also roll your old 401(k) account into an IRA as you did previously. You CANNOT mix conventional IRA and Roth IRA funds without tax consequences, because 401(k)s and conventional IRAs are pretax dollars while Roth IRAs are after-tax dollars.
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