IRA – combining monies

Submitted by Catherine Turner on Fri, 2014-10-17 12:25

There is a IRA R/O in place. Is it NOT advisable to combine a contributory (deductible) Traditional IRA account to the IRA R/O?
And if the answer is that it is okay, is it then permissible for the account holder to make additional annual IRA (deductible) contributions into this same account…..
in essence pooling all of this money together into one single account?



Submitted by Alan - IRA critic on Fri, 2014-10-17 19:38

There are no tax reasons to keep them separate. However, there are two other reasons that you may or may not consider important:

  1. Creditor protection – if you live in a state that does not provide full creditor protection for IRA accounts, and you think that at some point you will have an IRA value that exceeds 1.25 million, you might keep the rollover IRA separate so that it will not have a dollar limit for creditor protection. If combined, the 1.25 mllion plus inflation adjustments will apply.
  2. Rollover to current employer plan – if you want to roll your pre tax IRA value over to your employer plan, some plans accept only rollover IRA accounts and not combined accounts. In those cases you should keep the rollover IRA separate from IRA accounts that you make regular contributions to.

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