rollover

Can roth monies be rolled over into an existing traditional ira 401 account?

Can roth monies be rolled over into an existing traditional ira 401 account?

E Staudt,

I am not sure why you would want to do that....

In some circumstances you can Recharacterize your ROTH IRA contributions to a Traditional IRA. But this must be done by the due date (plus extensions) of your tax return. After that extension time the answer is no.

Example: You made a 2008 ROTH IRA Contribution or Conversion. Now you find that you are not qualified to make that contribution or Conversion, or you determined the tax bite is too large. You can Recharacterize your ROTH contribution or conversion to a Traditional IRA. You have until October 15, 2009 to do the recharacterization on your 2008 contribution or conversion.

The 401k plan would need to make a determination if they want to accept the funds from your IRA. Going from a ROTH IRA to a Traditional 401k, I doubt the 401k plan would accept the funds. Doing so could invalidate the entire 401k plan for all employees. That would not be good.

I am 56 and would like to take an early retirement. I have a company retirement and a 401K. I can withdraw my 401K without penalty (because I am retiring), but must withdraw it all. I would like to rollover this money and spread it out monthly to suppliment my income until I turn 62. Is there anything I can roll it over to that I can take monthly withdrawals without paying the 10% penalty before I reach 59 1/2? I would like to pay taxes on the amount as I withdraw it and not on the lump sum from the beginning. My spouse has already retired and withdrew her 401K to payoff debts. It would put us in a high tax bracket for both of us to do it this year. Her company retirement is much better then mine. Can you give me any ideas? Thanks.

Jake3008,

You are in a good spot age wise. Being over age 55, you can take penalty free distributions from your 401k after you retire. Ask your 401k administrator about this option.

If you know the amount you will need between now and age 59.5, you can leave that amount in the 401k. Then do the rollover of the balance (the amount you will not need) to a Traditional IRA. Contact the IRA custodian that you want to handle your IRA. Tell them what you want to do. They will send you the necessary paperwork, and take it from there. One note, you can not take the money from the 401k until after you retire, or otherwise leave the employer.

Retiring at age 56 will most likely limit your SS retirement benefit. That benefit is calculated on your 35 highest income years including zeros if needed to fill that 35 year period. For most workers the last working years are the highest earning years. Retiring earlly is likely to limit your high earning years, and may add some zeros into the calculation for your SS retirement benefit.

When it comes time for you and your spouse to take SS retirement benefits, one of you may want to delay this until Full Retirement Age. You may find this Kiplinger article worth the time to read: http://www.kiplinger.com/magazine/archives/2008/07/secret_ways_to_boost_social_security2.html?kipad_id=40?kipad_id=40