Consolidation of IRA’s
I have a client who is employed. Earns $30,000 per year and has a pension which will pay her upon retirement $600 per month.
Her husband is employed earning $40,000 per year
She has IRA accounts with various banks totaling approximately $85,000 Can she consolidate all these IRA’s into one IRA account.
Can she contribute to this IRA?
Permalink Submitted by Alan Spross on Thu, 2008-04-17 16:10
There is no reason she cannot consolidate the existing accounts, although staggering the maturity dates of CDs is likely the reason for the various accounts, and banks like to keep CDs in separate IRAs. Therefore, in order to get the yield desired from CDs, it may be difficult to consolidate. However, even for those who want CD investments, discount brokers mostly offer CDs that are FDIC insured from several sources, and in that case CDs could be used in a consolidated IRA brokerage account.
There is no reason she could not contribute to a new or consolidated IRA account from current earnings. Unless there is other income such as investment income that you did not indicate, their joint income is low enough for both of them to deduct a traditional IRA contribution.