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Author: bacon Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76406  
Subject: Re: 401k rollover to IRA, IRA rollover to Roth I Date: 3/21/2001 9:25 PM
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<<Is this correct?

You can contribute to both a 401k and a Roth IRA.
The Roth is limited to $2000.
The 401k doesn't have this limit.
You can rollover your 401k into a traditional IRA
You can rollover your traditional IRA into a Roth.

If this is true then would'nt I be able to contribute more than this $2000 limit by simply rolling over from 401k to traditional, then to Roth once a year??

What am I missing here....>>

It's correct as far as it goes. The rub is the frequency at which you can roll your 401(k). Basically, the only time you can take your money out of your 401(k) for this purpose (without substantial penalty) is when you leave the company. A 401(k) rollover is a one-shot affair. This rollover does not count against your IRA contribution limit, so in the one year of the rollover, you could easily exceed $2k in the deposit to your IRA.

One minor detail, also: while it's true your 401(k) doesn't have a $2k/yr limit, it does have, for 2001, a $10.5k limit from you, and a $25k (I think) limit on total contributions, including any company match.

Hope this helps.

Eric Hines
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