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Greetings, KC, and welcome. You asked:

<<I have a 401K account from a former job that I've left invested with that company's plan (which hasn't had great returns) and I also have some other funds from a different previous employer from when part of the company's pension plan was terminated. I rolled these funds over into a tax-deferred annuity which has had so-so returns.
I would like to invest both of these accounts more wisely and more profitably. They are both in mutual funds currently at different companies and I'm thinking I would be better off buying stock with them. My questions are: 1) Would I need to roll these over into a self-directed IRA so I could invest them as I want?>>


Yes, to trade stocks you would have to transfer those monies to a self-directed IRA at the brokerage of your choice.

<<2) Since I've read before that a person shouldn't mix retirement funds that have both employee and employer contributions (the 401K money) with strictly employer contributions (tax deferred annuity). Is this true? Should I and/or can I legally combine them into the same IRA,etc.?>>

No, it is not true assuming the money now in your annuity came from a qualified retirement plan and not a 403b plan. If it came from a typical defined benefit plan (i.e., a pension plan), then it can be mixed with 401k money and still retain its eligibility for a later transfer to a new employer's plan. OTOH, even if it came from a 403b plan, you can still mix the money. By doing so, though, you would lose any ability to later transfer those funds to a new employer's qualified retirement plan. Around Fooldom we don't consider that a big issue because we prefer the freedom of investment choices within an IRA as compared to that found in a typical company plan.

Regards..Pixy
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