Roll an IRA into a Keogh account?
I have a new client that has a Keogh account at a brokerage firm. The account was started by his medical practice but the practice stopped contributing to it and essentially rolled everyone’s individual accounts out to each person to deal with. He rolled his to a brokerage firm where it is still a Keogh. He also has a small IRA at the same brokerage firm. My question – can we roll the IRA over into the Keogh? We want to keep the Keogh account as he can contribute more to that account than to a traditional IRA (obviously) and he is still working. Everything I have been able to find tells me that I can roll the Keogh into an IRA (really?! no kidding!) but nothing talks about going the other way. My experience has always been with traditional 401(k) plans which have written into the documentation an ability to accept or not accept rollovers from IRAs. Are Keogh’s the same way? Would the original Keogh plan document govern (assuming we could even find it)?
Thanks in advance for any assistance!
Alan Myers
Permalink Submitted by Alan Myers on Mon, 2024-12-09 16:14
Hello Alan,
Thanks for the response and feedback. The client is currently 72 but still working (physician) and, as I indicated in my original note, his practice (several partners at the time) started the Keogh plan but terminated it apparently some years ago when they stopped being able to make matching contributions and just rolled everyone’s account balance out to the individuals.
Frankly, I am not all that familiar with Keogh plans myself, though I do consider myself reasonably knowledgeable about 401(k) plans. I knew the Keogh plan contribution limit was in line with a 401(k) but that is far more than he could contribute to a traditional IRA. The reason for the question is that he does have a small (about $2k) IRA that I wanted to roll over to the Keogh to make it easier to manage.
Frankly, given the brokerage firm where the Keogh is custodied, I would worry about whether the staff can even spell Keogh, let alone know what it is or how to deal with it. I am in the process of trying to become as intimately familiar with it as possible so I know what I am getting my hands around. He does have a CPA that helps him with his taxes so I will be checking with this person to see if they are familiar with the rules for Keogh plans. Since my client turns 73 next year, I need to figure out if he has to start taking distributions from this plan or if he can delay as long as he is still working.
Thanks again for the info and if you know of any great resources for educating me on the Keogh plan, please feel free to point me in that direction!