IRA Rollover

Posts Tagged ‘ira rollover’

Question: Rollover IRA from old job 401K Can I add money to this and what is the tax implication?

I have a Rollover IRA from a previous employer’s 401k plan. Can I add money to this and wha is the tax implication? Does monies added become tax deferred until retirement? Do I need to open another account?

Thanks and Happy Holidays to all………….

Answer: If your Rollover IRA is separate from your other IRAs (if you have any), you can easily move it into another employer sponsor retirement plan. If you make contribution out of your own pocket (not from your paycheck) into your Rollover IRA, you lose the right to move your Rollover IRA into another employer’s retirement plan.

In all IRAs, your investments grow tax-deferred. If you add money to it, you won’t pay tax until you withdraw it.

If you don’t have your own IRA (beside the Rollover IRA), you should start a Roth IRA (if your income is below $100,000). In 12 months after you started the Rollover IRA, you can roll the assets from the Rollover IRA into a Roth IRA. Any withdrawals from Roth IRA are tax free after age 59 1/2.

For more information about IRAs, check out this blog: http://obe231.blogspot.com