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No. of Recommendations: 6
I used to work at Microsoft, and still have my 401k from there 100% in MSFT.

If you have more than 4% of your total portfolio in that one stock, you'd be best to do anything you can do diversify. Yesterday. Think Enron.

Do I have to open a rollover IRA to receive the money from my 401k, or can I rollover into a "Traditional IRA"?

I'm not sure what you mean by a "rollover IRA." My understanding is that the act of transferring monies from one tax deferred account to another is the "act" of rolling it over. To the best of my knowledge, and I'm sure I'll be corrected here if I'm wrong, but there should be no reason why you couldn't open a traditional IRA, roll your money over to a traditional IRA and then contribute to the same account. At least that's what my husband did a few years back.

I don't have any IRAs, because with the small amount that can be contributed each year it hasn't seemed worth it.
And if I have to go into a Rollover IRA, can I decide to make those little $2-3k/yr contributions to that account?

It's called "compounding." By not utilizing that type of savings and tax opportunity, you're just throwing money away. And for the record, there are a lot of people in the world who struggle and sacrifice to save enough to put those "little $2-3k/yr" contributions in their retirement.

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