No. of Recommendations: 0
<<Cgiorgi wrote>>
2. Once you roll that money into a Roth IRA Rollover account, you cannot contribute to that rollover account. If you wish to contribute to a Roth IRA, you must then open up a Roth IRA Contribution account. In other words, let's say that you want to invest your Roth IRA in fund X (if you want to invest in funds), and that you also want to contribute to fund X because you think it is a good fund. Then you will have a Roth IRA Rollover account with fund X (one account number) and have a Roth IRA Contribution account with fund X (one account number).

<<my comment>>
There is no legal requirement to keep rollover contributions and non-rollover contributions in separate Roth IRAs. The IRS *suggested* that IRA owners may want to do this so they will have greater flexibility to make early withdrawals without paying penalties. And some brokerage houses apparently feel that this suggestion should be taken as a directive, perhaps feeling that they could be held liable if someone combined the two kinds of contributions in one account without fully understanding the issue. I can understand this concern, but I think it's unfair if the brokerage house charges a fee for a separate IRA, given that the law is absolutely clear that the separate IRA is not legally required.

KAT in Chicagoland
Tax Guide for Investors
Now with expanded and revised
Roth IRA information
Print the post  


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.
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.