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Roth vs Traditional IRA and 401K etc

August 1st, 2008 at 01:46 pm

I have 20K+ in my old 401K. We can move it to our own IRA or move it to the new 401K. I thought you were not allowed to have both the traditional IRA and 401K at the same time? I thought if you had 401K, you had to have a ROTH IRA? Egad! Any resources I can read up on????

4 Responses to “Roth vs Traditional IRA and 401K etc”

  1. monkeymama Says:

    You can have all 3 at once. 401k, traditional, ROTH.

    Your confusion may be in that if you have a 401k you MAY be limited in to how much you can contribute into a traditional IRA. However, there is no limit in converting a 401k into an IRA. (Good point though, you may be unable to add more money to it, depending on your 401k plan. That one's more complicated).

  2. jIM_Ohio Says:

    technically the IRA is a rollover- that has slightly different IRS treatment than the traditional.

  3. terri77 Says:

    You may have both a Roth and a tradition IRA, but you may not contribute more that the IRS annual limits to the combined accounts, or no more than a combined $5,000 to both. I'm assuming that you're under 50.

  4. financial fitness Says:

    You only need to rollover a 401k if your company you had 401k with requires it (not all plans do).

    You can have a 401k and an IRA.

    Annual limits are $15,500 for 401k and 5,000 for IRA.

    Note it is regardless if the 401k is a Roth 401k or Traditional 401k or if the IRA is a RothIRA or a Traditional IRA, annual amount limits are the same.

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