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As confused as I am about the retirement account types, it has come the time for me to deal with them.

I am quitting my job this month. I plan to roll my 401K (approx $30,000) over to IRA.

After this transaction is done, can I roll this amount into a Roth IRA account? I know that I might have to pay taxes up front (for the $30,000).

I also have a personal IRA already (worth about $15,000) -- would it be a good idea to leave this account alone or to roll it over to Roth IRA as well?

I am trying to figure out what is the best strategy for handling the 401k fund. Thanks!

/foolseb
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<< I am quitting my job this month. I plan to roll my 401K (approx $30,000) over to IRA. >>

Good planning. You should roll it into a new account, not mixing it with a contributory account.

<< After this transaction is done, can I roll this amount into a Roth IRA account? I know that I might have to pay taxes up front (for the $30,000). >>

Yes. Once it's in a traditional IRA, you can do anything with it you want to. As long as you leave it in a separate account, you have more options. Read up on "conduit" IRAs in the FAQ.

<< I also have a personal IRA already (worth about $15,000) -- would it be a good idea to leave this account alone or to roll it over to Roth IRA as well? >>

The additional 401(k) money doesn't really affect this decision. I believe "convert/not convert?" is also covered in the FAQ.

Phil Marti
Tax Preparer
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I will read the FAQ to answer some of my questions.

Quick question: Do I need to perform the rollover transaction within 60 days?

Thanks.

/seb
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<<I will read the FAQ to answer some of my questions.>>

Great...

<<Quick question: Do I need to perform the rollover transaction within 60 days?>>

There is also an article in the Taxes FAQ area dealing with rollovers and transfers. You would likely be served best with a "trustee to trustee" transfer as opposed to a rollover.

But if you do decide on a rollover, then you will have to make sure that the funds are deposited into your rollover IRA within 60 days of receipt of the funds.

TMF Taxes
Roy
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