No. of Recommendations: 1
The only real concern in merging IRA contributions with rollovers from 401K, is that your 401K funds can no longer be transferred to a future employers 401K. For most of us, the IRA is so much better in terms of control and investment choices that is a negligible loss.

All of the money that came from your 401K is pretax. You keep track of nondeductible IRA contributions (ie aftertax) when you file that form (is it 8086?)with your 1040 every year you make a contribution.

Thats all there is to it. There are no further problems. When you take distributions, all of the funds will be taxable except for the portion of each distribution designated to be aftertax.

So don't worry about it. Go ahead and merge additional contributions and 401K rollovers into the same account. I would continue until they get to be very large. Consider starting a second IRA only when balances exceed $100K.

Best of luck to you.
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement