Rollover IRA

[Guest Gracey]

Hi everyone!

I have recently decided to leave a company with which I have a 401K worth approximately $16,500. I will be in between jobs for a while, not having the option of investing in a new employer's plan. I am considering rolling this 401k over to a traditional IRA, however, I already have a Roth Ira, which I have had for several years. I have the Roth invested in a Target Retirement fund, which I am happy with. Does anyone know of any disadvantages to having both types of IRA's at the same time? Assuming I were to do this, is it best to start splitting my yearly contribution between the two IRA's or to just continue to max out my Roth which I have always done and leave the new traditional IRA alone. Any feedback would be greatly appreciated. Thanks, Gracey

[masteff]

Does anyone know of any disadvantages to having both types of IRA's at the same time?

No.

is it best to start splitting my yearly contribution between the two IRA's or to just continue to max out my Roth which I have always done and leave the new traditional IRA alone.

This is entirely a personal financial and tax decision. You might want to consult with a competent professional tax advisor who can help you assess your personal situation.

[GMK]

^ good answers.

The only reason I can think of off-hand to fund a traditional IRA instead of a Roth is if you can deduct the contributions, and then it still depends on your personal situation.

Otherwise, if it's all after-tax money, I'd put it in the Roth. (free advice is worth what you paid for it)