Rollover IRA or IRA
If I rolled a 401(k) into a [b]Rollover IRA[/b] 3 years ago, does it matter if I now transfer this Rollover IRA to an IRA that is labeled as just an IRA – not a Rollover IRA?
So does it matter if the new IRA will be labeled just “IRA” not “rollover IRA.”
Permalink Submitted by Alan Spross on Thu, 2012-09-27 19:38
There are a couple advantages a rollover IRA has over a non rollover TIRA, but they might not matter to you:
1) If you live in a state that does not protect IRA accounts against creditors, the federal bankruptcy act protects rollover IRAs without a dollar limit. Other IRAs are limited to 1,000,000 in total. If you never expect to have over 1,000,000. then the rollover does not matter.
2) If you ever want to roll your IRA back into an employer plan, some plans that accept rollovers only accept rollovers from a rollover IRA.
If you transfer your rollover IRA into a contributary IRA, the funds will be commingled, and the IRA would no longer be registered as a rollover IRA.
Permalink Submitted by Robert Wright on Thu, 2012-09-27 20:04
As always, thanks Alan.