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Background: I'm 27, have significant assets & investments outside my retirement accounts. I used to work at Microsoft, and still have my 401k from there 100% in MSFT. My 401k with my current employer is 100% in a S&P 500 fund. My personal brokerage account is invested in individual stocks.

Given the continued less than steller performance of Microsoft (the company, not the stock, although the stock hasn't done too well either of late...), I'm re-evalutating my interest in keeping my old 401k in MSFT until I have to withdraw from it. I never really have planned on needing to have that money in retirement (that would be unlikely ... I'd have to do a lot wrong with everything else I have).

Anyway, the thought I've had is that even if I want to keep my money in MSFT stock, I could do that just as well in an IRA as I can in their 401k plan. But if I decide I want to sell or do something different with that money, I have a lot more options in an IRA than in the 401k plan (which really has only one other option I would even consider - an S&P 500 fund).

I don't have any IRAs, because with the small amount that can be contributed each year it hasn't seemed worth it. The 401k's with much higher contribution limits are more flexible, and avoiding locking other money up until I'm 60 yrs old generally seems better (so I tend to invest a significant amount monthly into my normal brokerage account).

So (finally) here is the question: Do I have to open a rollover IRA to receive the money from my 401k, or can I rollover into a "Traditional IRA"? And if I have to go into a Rollover IRA, can I decide to make those little $2-3k/yr contributions to that account? (I don't think I care about being able to roll into another employer plan... they usually stink anyway in terms of investment options... if anything I'd like to be able to bring the money from my current employers 401k into the same IRA when I next move jobs...).

If it matters any, my current brokerage of choice is Datek (gulp - not sure what happens with the merger w/ Ameritrade), so I would like to have my IRA account there for simplicity (I also manage custodial accounts for some of my niece & nephew at Datek...)

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