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Author: luke77 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 74802  
Subject: Rolling over multiple IRAs Date: 12/31/2013 9:57 PM
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Hi all,

I'm trying to get my parent's retirement accounts in order, and I have a question about rolling over IRAs. Both my mother and father each have multiple IRAs (and 401ks) from past employers. Some of the IRAs are Roth and some are Traditional. I'd like to roll over all of their past retirement accounts into one brokerage so that everything is one place and somewhat organized.

However, I'm not sure whether I can do this. For instance, my mom has two Roth IRAs, three traditional IRAs, and a 401k, all from previous employers. I've opened a rollover IRA at a brokerage, into which I want to transfer these IRAs. But what is a rollover - a Traditional IRA or a Roth? If it is a Traditional IRA, I can't move the Roths into the rollover, because then she would end up paying taxes on withdrawals. If it is a Roth IRA, I can't move the Traditional IRAs of 401k to it (without paying taxes on the distribution), because then she would not pay taxes on the contributions or the withdrawals. And it seems like I can't combine the Traditional and Roth IRAs into one account since they are different types of accounts.

So which type of IRA is a rollover? Is there a way to do what I want to do, which is basically combine all of my mother's accounts in one brokerage? I'd even be ok setting up two accounts, a 'Rollover Roth' and 'Rollover Traditional', if that can be done.

Thanks for any advice.
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Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 74040 of 74802
Subject: Re: Rolling over multiple IRAs Date: 1/1/2014 9:38 AM
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I'd like to roll over all of their past retirement accounts into one brokerage so that everything is one place and somewhat organized.

However, I'm not sure whether I can do this


Sure you can.
* trad IRAs & 401Ks can roll into one trad IRA
* Roth IRAs can roll into one Roth
For each person, of course -- the "I" means Individual.

You only have to pay tax when taking money out of a tradition IRA and putting it anywhere other than another traditional IRA. Do a "custodian to custodian" transfer and you won't even have any tax paperwork.

We have all our various IRA accounts at Etrade, where I can manage them all from one logon.

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Author: reallyalldone Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 74041 of 74802
Subject: Re: Rolling over multiple IRAs Date: 1/1/2014 10:42 AM
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Both my mother and father each have multiple IRAs (and 401ks) from past employers.

Before you do anything with the 401Ks, how old are your parents ?

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Author: GWPotter Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 74042 of 74802
Subject: Re: Rolling over multiple IRAs Date: 1/1/2014 11:19 AM
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ReallyAllDone wrote

Before you do anything with the 401Ks, how old are your parents?

Could you explain how one age has any bearing on combining or rolling over IRAs?

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Author: reallyalldone Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 74043 of 74802
Subject: Re: Rolling over multiple IRAs Date: 1/1/2014 11:32 AM
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Could you explain how one age has any bearing on combining or rolling over IRAs?

IIRC, 401ks allow withdrawals without the 10% penalty at 55(there are some requirements - google "401k 55"). While there are ways to begin withdrawing from IRAs at that age(google 72t), it is more complicated.

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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 74045 of 74802
Subject: Re: Rolling over multiple IRAs Date: 1/1/2014 12:07 PM
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GWPotter:

<<<Before you do anything with the 401Ks, how old are your parents?>>>

Could you explain how one age has any bearing on combining or rolling over IRAs?

Rad has already responded, but one needs to pay attention to the details. Her comment was specific to 401-k plans, not all IRAs. And in addition to her response to you, if there is company stock in the 401-k, then the NUA rules also might be beneficial but lost if a 401-k plan is rolled into an IRA.

Regards, JAFO

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Author: BruceCM Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 74050 of 74802
Subject: Re: Rolling over multiple IRAs Date: 1/2/2014 11:29 PM
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And not to complicate this straightforward question too much, but you also need to make sure you check for and track, if applicable, any basis that is included in the direct 401(k) rollover. If there is basis and it isn't taken into account at future withdrawals, it will be taxed again as ordinary income.

BruceM

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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 74052 of 74802
Subject: Re: Rolling over multiple IRAs Date: 1/3/2014 11:31 PM
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So which type of IRA is a rollover?

There really is no such thing as a rollover IRA. An IRA is an IRA is an IRA. The only distinction is traditional vs. Roth.

A rollover is simply a type of contribution to a Roth or traditional IRA.

--Peter

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Author: BruceCM Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 74053 of 74802
Subject: Re: Rolling over multiple IRAs Date: 1/4/2014 2:45 PM
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There really is no such thing as a rollover IRA.

Prior to EGTRRA of 2001, a 'rollover IRA' was a form of IRA that could receive assets from an employer sponsored retirement plan, hold them, and then was able to roll this over to another employer sponsored retirement plan, providing it was kept distinct and separate, as I recall was the IRS terminology.

Today, plans are fully portable between one another, if plans allow for it, and so there is no need for a 'rollover' IRA, although I understand it is still used for asset protection purposes, as retirement plan assets within a 'rollover' IRA receive ERISA protection from creditors, whereas IRA asset protection is limited to $1.17MM or greater if the state allows.

BruceM

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