Do I have a rollover Roth IRA? (Is there such a thing?)

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Do I have a rollover Roth IRA? (Is there such a thing?)

Post by eukonomos » Thu Oct 04, 2018 9:28 am

I rolled over my 401k, mostly into a rollover IRA, with some post-tax and designated Roth money going into a Roth IRA, both with Fidelity. I understand the rollover IRA maintains some asset-protection features.

1. Does the Roth IRA also have some asset protection? Fidelity lists it as a ROTH IRA, not a ROLLOVER ROTH IRA. I haven't found an answer in searching so far.

2. If yes to Question 1, did that change when I did a partial Roth conversion from the rollover IRA into that Roth IRA?

Why I think it matters -
I also have an older traditional IRA with Fidelity and a Roth IRA with Vanguard - both mutual fund accounts, not brokerage accounts. I'd like to simplify and continue Roth conversions. I plan to convert the entire older traditional IRA to Roth this year.

I could:
A. Convert the tIRA into the existing Roth at Fidelity. But if the (rollover) Roth has some protection, I probably do not want to do that.

B. Convert the tIRA into a new Roth at Fidelity (assuming Fidelity will do this), but that adds another account, not simplifying.

C. I could convert the Fidelity tIRA into the Vanguard Roth. I am not sure if that can be done in one step or I need to convert and transfer separately. Since neither is a brokerage account, I am not sure if I can transfer the Fidelity funds directly. I suppose I could liquidate and move cash. Or maybe do step B, change the Vanguard Roth to a brokerage account, then transfer.

If there is no rollover Roth protection, Step A would be the easiest to do. I would likely want to combine the two Roths at one place or the other to simplify. Otherwise I would maintain the two Roths.

Any suggestions?

By the way, when I spoke with Fidelity a while back about limitations in my old mutual fund tIRA account (I was asking about purchasing ETFs), the rep offered to combine it with my new Rollover IRA. But I think that would pollute the rollover. He didn't mention just changing the account type.

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