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I have a Rollover IRA from a previous employer's 401k plan. Can I add money to this and wha is the tax implication? Does monies added become tax deferred until retirement? Do I need to open another account?

Thanks and Happy Holidays to all.............

2006-12-23 01:57:25 · 4 answers · asked by igotstoknow 1 in Business & Finance Personal Finance

4 answers

If your Rollover IRA is separate from your other IRAs (if you have any), you can easily move it into another employer sponsor retirement plan. If you make contribution out of your own pocket (not from your paycheck) into your Rollover IRA, you lose the right to move your Rollover IRA into another employer's retirement plan.

In all IRAs, your investments grow tax-deferred. If you add money to it, you won't pay tax until you withdraw it.

If you don't have your own IRA (beside the Rollover IRA), you should start a Roth IRA (if your income is below $100,000). In 12 months after you started the Rollover IRA, you can roll the assets from the Rollover IRA into a Roth IRA. Any withdrawals from Roth IRA are tax free after age 59 1/2.

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2006-12-24 14:02:15 · answer #1 · answered by Anonymous · 3 0

Suggestion: Roll over the 401-K into a new and seperate account. Do not add anything to it. Remember, you get to do these things at the whim of the governement ( US ). They have been known to change the rules for the better and the worse.

BTW, NEVER roll over monies from one 401-K to another 401-K. When you get the chance to move it to an IRA in your control, DO IT. The company has no right to hold on to the money once you leave.

2006-12-23 02:08:00 · answer #2 · answered by know_it_all_NOT 3 · 2 0

in case you rollover at the instant into the IRA, there's no tax implication. Upon withdrawal, once you're on the terrific suited age, you will could desire to pay the taxes on the constructive factors. you could no longer use this funds to fund a well-known contracting business corporation. Nope. in case you are trying this, you will could desire to pay huge effects. do no longer try this. the funds this is interior the 401(ok) or the IRA must be seen untouchable till retirement. in case you desire to take a loan against it, then go away it interior the 401(ok) in case you could. If this is which comprise your contemporary company, you're in a position to take a loan against it. examine which comprise your plan administrator. you could no longer borrow against an IRA and oftentimes can't borrow against a 401(ok) from a former company. in case you won't be ready to borrow against a contemporary-company 401(ok), which i assume you won't be ready to in case you attempt to start a business corporation, then you certainly'll extra suitable locate yet differently to get a business corporation loan.

2016-11-23 13:00:18 · answer #3 · answered by ? 4 · 0 0

Yes, you've already rolled it over into your own IRA. It becomes just like a regular IRA at that point. You can add money and deduct from your taxes, up to the $4k yearly limit ($5k for older workers). You can also choose different investments, etc.

2006-12-23 03:25:57 · answer #4 · answered by Uncle Pennybags 7 · 1 0

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