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On Fri, 14 Nov 2003 03:58:37 CST, paulmaf[at]aol.com (PaulMaf) wrote:


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If a 401k accepts rollovers from a traditional IRA, is the 401k plan
required to account separately for those dollars, or are those dollars
commingled with the rest of the qualified money? (I am wondering if
by rolling, the saver may get access to the old IRA funds under some
conditions at age 55 instead of 59.5?)


-HW "Skip" Weldon
Columbia, SC

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There is no need to do so today. The rules changed.

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This is immaterial today, He can comingle and still roll it into an employer's
401K at a later date.

<BreadWithSpam[at]fractious.net> wrote in message
news:yobznf01769.fsf[at]panix2.panix.com...
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There are some caveats that must be addressed since complete facts were not
discussed. There are some potential dangers to rolling 403b assets into an
IRA. Certain 403b contributions have different beginning dates for minimum
distributions (i.e., age 75 instead of 70.5), and once you mix the two, you
get the ealier date on all the money. This is irrevocable, AFAIK. Plus, 403b
funds can be borrowed, IRA funds cannot. Also, one may purchase life
insurance inside their 403b plan, but they cannot roll that policy into an
IRA.

gureleiANTISPAM[at]yahoo.com (xanuda) writes:

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How was that existing IRA funded? Did you make contributions
directly or did you roll it from a 401k or 403b?

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"not really needed"? It was never really needed. It's just
that keeping it separate keeps certain options open to you
in the future - in particular, the ability to roll it back
into another employer's plan in the future.

If you are positive that you'll have no interest in ever
rolling it back into an employer's plan, go ahead and
comingle.

I was trying to think of any reasons why one would roll
back into an employer plan, though.

Off the top of my head, all I come up with are:

1. employer plans often allow one to start extracting
money a little sooner.
2. different (though better? I don't know) protection
to the money in case of a lawsuit against you.
3. access to certain funds, especially stable-value funds
that are harder to come by outside of such a plan

4. (and this might be worth discussing, as it just
occurred to me and may or may not be valid) - if
one's made non-deductible contributions to the IRA,
when one extracts IRA money later on, the percentage
of those distributions which is non-taxable (ie.
considered the return of that already-taxed money)
is the proportion of non-deductible contributions
compared to the total balance of all of your IRA
accounts. If one's rolled an account back into
an employer plan, the total IRA balances no longer
count the money in that employer plan, and therefore
one may deplete the already-taxed balances faster
by starting to take IRA distributions but leaving
money in the new employer plan alone.


I don't know if any of these are great reasons to keep
a separate rollover account, but since it didn't cost
anything more to do so, I saw no reason to give up
the possibility of rolling it back to a future employer
plan, so I do keep my rollover separate from the IRA
that I make direct contributions to.

--
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Are you posting responses that are easy for others to follow?
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Hi. I'm trying to roll over funds from a 403b to an IRA with a mutual
fund company. I currently have an IRA account with them I was going to
establish a separate account for the 403b money, but the phone rep
said that nowadays doing that is not really needed and I can over my
403B money into an existing IRA. Does anyone have any opinion on this.
I can't really remember the reasoning behing rolling over 403b into a
separate IRA so I can't really make an informed decision here.

thanks

gene