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URL:  http://boards.fool.com/leslidio-writes-in-part-keep-in-mind-i-11077540.aspx

Subject:  Re: Combine my 401K's? Date:  7/22/1999  9:18 PM
Author:  Bob78164 Number:  12486 of 86452

Leslidio writes (in part):

Keep in mind, I believe that if you rollover a pretax retirement fund like a 401K into an IRA, you won't be able to add any post-tax contributions to it. I think they call that "comingling" funds and the tax consequences can get pretty messy. At least that is what one financial advisor told me once. It might be bogus - anyone else know?

I reply:

I admire your skepticism; in my view, it's quite Foolish. The tax consequences of commingling are simple and straightforward. You are allowed to commingle new contributions with money transferred or rolled over from a 401(k) or other qualified plan. If you do so, however, you "taint" the money and forever lose the ability to place it in a new employer's plan. Most Fools don't care about this consequence, but it can matter to some, especially those who plan to retire at precisely age 54 or 55. Maintaining the account separately, however, merely costs some additional transaction costs (often quite minor) and paperwork (personal preference). --Bob
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