Rollover IRA

I rolled a 401(k) account to a Rollover IRA.

All of the 401(k) was pre-tax contributions plus the earnings on these pre-tax contributions..

Is there any reason I shouldn’t make pre-tax IRA contributions to the Rollover IRA?

If I did this, my pre-tax contributions will be commingled with the rollover balance.



The benefits of keeping the rollover IRA separate and not making regular contributions to it are listed below. If these benefits are not needed, there is no reason not to make new contributions to the rollover IRA:

  1. If you ever want to roll your pre tax IRA dollars into your employer plan, perhaps to enable a back door Roth contribution, some employer plans only accept rollovers from rollover IRAs. If you make regular contributions to a rollover IRA, it is no longer a rollover IRA (even if the custodian does not drop the “rollover” from the title description), and you may not be able to complete the IRA rollover.
  2. If your state does not protect IRA accounts from creditors, your creditor protection may be limited to that of the federal bankruptcy Act. Under that law, your IRAs that are rollover IRAs are protected without dollar limits, but IRA accounts that have received regular contributions are limited to a dollar limit of 1.245mm adjusted for inflation. 

Thanks Alan.

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