transferring a rollover ira back into a 401(k)
I believe a person can move their rollover IRA into their current employers 401(k). Are there any caveats to be aware of in doing this?
Thanks.
I believe a person can move their rollover IRA into their current employers 401(k). Are there any caveats to be aware of in doing this?
Thanks.
Permalink Submitted by Alan Spross on Wed, 2012-01-11 23:53
Two questions to address:
1) How long does he want those funds to stay in the 401k, and how long does he have to wait before getting access to them?
2) While these funds are in the 401k, what expenses will he pay to use the investment options there?
Note that the max amount he can roll into the 401k cannot exceed the pre tax IRA balance of all his non Roth IRAs. The 401k cannot accept ANY after tax amounts. Also, many 401k accounts will accept funds from TIRA accounts that are not rollovers. If the person wants the total pre tax IRA balance to go to the 401k, they should check if the plan will accept a rollover from other TIRA accounts the person might have. Some people want to do this to separate any non deductible contributions in their TIRA, so they can then convert them tax free to a Roth IRA.