Go to Jeff Salisbury LWGate Home Page.From: paul.j.stadnik@exgate.tek.com
Subject: RE: rollover IRA's
Date: Thu, 5 Nov 1998 14:27:13 -0800
Previous Article (by Author): Re: Roth IRA "Steve Foulks"
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On Nov. 3 Ken Stone wrote: >> What are the major considerations between rollover and non-rollover IRA's? >> What are the concerns if I make a contribution of non-rollover money into >> an account that was created by a rollover? I would like to expand on the question. I have funds in contributory as well as rollover IRA's (from several different employers). In order to minimize recordkeeping, I would like to consolidate these accounts. I recall there were at least two issues involved. 1. comingling prevents rollover to another qualified employers plan (401k). 2. comingling prevents the use of some sort of income averaging. Can anybody confirm and / or expand on this? Are there any other issues involved? Have recent tax law changes affected these items? Regarding the first issue, these IRA's are in self-directed brokerage accounts where I am happy with the range of investment opportunities (I'm invested primarily in mutual funds), and I feel comfortable with my ability to manage these funds. I do not anticipate wanting to rollover to an employer's plan, so this limitation does not concern me. I am unclear on the second issue. What income averaging is allowed? I recall 5 and 10 year averaging mentioned, but there were age and other limitations to using this. Is this only for total withdrawals, or does it also apply to partial withdrawals? Does it only apply to withdrawals from employer plans? If so, this means the rollover IRA needs to be placed back into an employer plan before income averaging is allowed. How advantageous is averaging?; it seems one would prefer to extend IRA withdrawals over time in order to minimize taxes. If so, averaging may be of limited use. Is my thinking correct on these issues? I welcome your comments. Thanks in advance, Paul - -
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