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Author: JeanDavid Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 81632  
Subject: Re: Fooling with IRA/SEP-IRA/401k Date: 4/15/1998 1:13 PM
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<<<Am I reading you correctly: Keep the 401k rollover in its own SEP-IRA account, and put any other funds (new investments, IRA rollovers, etc.) into a different SEP-IRA account so they don't taint the 401k funds?>>

Keep the 401k rollover in what's called a "conduit" IRA, a form of traditional IRA so-called because the only money you put into it is money that came from a qualified retirement plan like a 401k. As long as that's the only kind of money in that IRA, then it along with all earnings thereon may later be transferred to a new employer's qualified plan that accepts rollover money from other qualified retirement plans. Hence the name "conduit" because the interim IRA is the conduit between the plans for that money.>

I am mystified by why anyone would want to bother with a conduit IRA, since so many posts here and on the tax folder are concerned with how to get the money OUT of a 401(k) or 403(b)(?) because of the lousy investment options. Is there even one 401(k) plan that offers BETTER investment choices than those available in any decent broker-sponsored self-directed IRA? Why would anyone wish to transfer hard-earned funds back into a 401(k) or, worse, a 403(b)
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