Transfering from VG Rollover IRA to Merrill Traditional IRA

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Topic Author
cvsvm2007
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Joined: Thu May 02, 2019 3:26 pm

Transfering from VG Rollover IRA to Merrill Traditional IRA

Post by cvsvm2007 »

Friends,

I am trying to get on the bandwagon of opening an account with Merrill Edge to get the Bonus and invest in ETFs. My source account at Vanguard is "Rollover IRA" type. ME rep told me they are streamlining their products and my money from Rollover IRA has to go to Traditional IRA with ME. She said it is the same account type. Do you folks see any issues in moving money from Rollover IRA to Traditional IRA account?

Thanks
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celia
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Re: Transfering from VG Rollover IRA to Merrill Traditional IRA

Post by celia »

The only difference between the two accounts is the possible future inability to rollover the Traditional IRA into a future employer’s 401K (in order to do future Backdoor Roths cleanly). Some 401Ks only accept Rollovers IRAs that were completely funded from rollovers from previous employer retirement plans, not by employee IRA contributions (that typically go to a Traditional IRA). But the percent of companies that only accept Rollover IRAs is very small. I’d guess less than 5% of employer plans only accept Rollover IRAs.

A bigger problem for this situation is that IRA accounts are often not eligible for these bonuses.
Lionel Hutz
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Re: Transfering from VG Rollover IRA to Merrill Traditional IRA

Post by Lionel Hutz »

celia wrote: Thu Dec 02, 2021 7:55 pm The only difference between the two accounts is the possible future inability to rollover the Traditional IRA into a future employer’s 401K (in order to do future Backdoor Roths cleanly). Some 401Ks only accept Rollovers IRAs that were completely funded from rollovers from previous employer retirement plans, not by employee IRA contributions (that typically go to a Traditional IRA). But the percent of companies that only accept Rollover IRAs is very small. I’d guess less than 5% of employer plans only accept Rollover IRAs.

A bigger problem for this situation is that IRA accounts are often not eligible for these bonuses.
Re: 401ks, exactly. Previously, Traditional IRAs were specifically banned from rolling into a 401k, only Rollover IRAs were allowed. While the government has since allowed Traditional IRAs into 401ks, the plan must still technically adopt the language (just like a 401k isn't required to offer loans), and while most plans have adopted the new language, not all have.
sycamore
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Re: Transfering from VG Rollover IRA to Merrill Traditional IRA

Post by sycamore »

celia wrote: Thu Dec 02, 2021 7:55 pm The only difference between the two accounts is the possible future inability to rollover the Traditional IRA into a future employer’s 401K (in order to do future Backdoor Roths cleanly). Some 401Ks only accept Rollovers IRAs that were completely funded from rollovers from previous employer retirement plans, not by employee IRA contributions (that typically go to a Traditional IRA). But the percent of companies that only accept Rollover IRAs is very small. I’d guess less than 5% of employer plans only accept Rollover IRAs.

A bigger problem for this situation is that IRA accounts are often not eligible for these bonuses.
Merrill Edge has their 600ME bonus going on right now. IRAs are eligible for this one -- "Offer is limited to one CMA and one IRA".

Be sure to review all the terms & conditions, like this one "Assets transferred from other accounts at Bank of America, MLPF&S, Bank of America Private Bank, or 401(k) accounts administered by MLPF&S do not count towards qualifying net new assets."
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anon_investor
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Re: Transfering from VG Rollover IRA to Merrill Traditional IRA

Post by anon_investor »

sycamore wrote: Fri Dec 03, 2021 7:55 am
celia wrote: Thu Dec 02, 2021 7:55 pm The only difference between the two accounts is the possible future inability to rollover the Traditional IRA into a future employer’s 401K (in order to do future Backdoor Roths cleanly). Some 401Ks only accept Rollovers IRAs that were completely funded from rollovers from previous employer retirement plans, not by employee IRA contributions (that typically go to a Traditional IRA). But the percent of companies that only accept Rollover IRAs is very small. I’d guess less than 5% of employer plans only accept Rollover IRAs.

A bigger problem for this situation is that IRA accounts are often not eligible for these bonuses.
Merrill Edge has their 600ME bonus going on right now. IRAs are eligible for this one -- "Offer is limited to one CMA and one IRA".

Be sure to review all the terms & conditions, like this one "Assets transferred from other accounts at Bank of America, MLPF&S, Bank of America Private Bank, or 401(k) accounts administered by MLPF&S do not count towards qualifying net new assets."
There is an even better bonus right now:
https://www.merrilledge.com/offers/me750
sycamore
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Re: Transfering from VG Rollover IRA to Merrill Traditional IRA

Post by sycamore »

anon_investor wrote: Fri Dec 03, 2021 7:58 am
sycamore wrote: Fri Dec 03, 2021 7:55 am
celia wrote: Thu Dec 02, 2021 7:55 pm The only difference between the two accounts is the possible future inability to rollover the Traditional IRA into a future employer’s 401K (in order to do future Backdoor Roths cleanly). Some 401Ks only accept Rollovers IRAs that were completely funded from rollovers from previous employer retirement plans, not by employee IRA contributions (that typically go to a Traditional IRA). But the percent of companies that only accept Rollover IRAs is very small. I’d guess less than 5% of employer plans only accept Rollover IRAs.

A bigger problem for this situation is that IRA accounts are often not eligible for these bonuses.
Merrill Edge has their 600ME bonus going on right now. IRAs are eligible for this one -- "Offer is limited to one CMA and one IRA".

Be sure to review all the terms & conditions, like this one "Assets transferred from other accounts at Bank of America, MLPF&S, Bank of America Private Bank, or 401(k) accounts administered by MLPF&S do not count towards qualifying net new assets."
There is an even better bonus right now:
https://www.merrilledge.com/offers/me750
+1, and IRAs are eligible for that one as well.
Topic Author
cvsvm2007
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Re: Transfering from VG Rollover IRA to Merrill Traditional IRA

Post by cvsvm2007 »

Thanks all for the responses and guidance
Pops1860
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Re: Transfering from VG Rollover IRA to Merrill Traditional IRA

Post by Pops1860 »

One thing that has not been brought up.

Rollover IRAs (from 401k's, etc.) have some additional (federal) bankrupcy protections, that "traditiona'l" IRAs don't, as I understand was established by law/IRS maybe 10-15 years ago?? Qualified rollover IRAs are fully protected now, just like the 401k's they came from, from bankruptcy.

My understanding is that this "additional' protection does not require the rollover IRA $$ to be in a separate account, it can be co-mingled with traditional IRA $$. But keeping it separate as a "rollover" account simplifies the accounting if/when necessary (hopefully never).

So, we keep our "rollover" IRAs titled and separate from our other retirement accounts, just for convenience.
The power of accurate observation is often called cynicism by those who do not have it. ~George Bernard Shaw
Topic Author
cvsvm2007
Posts: 105
Joined: Thu May 02, 2019 3:26 pm

Re: Transfering from VG Rollover IRA to Merrill Traditional IRA

Post by cvsvm2007 »

Thank You
Topic Author
cvsvm2007
Posts: 105
Joined: Thu May 02, 2019 3:26 pm

Re: Transfering from VG Rollover IRA to Merrill Traditional IRA

Post by cvsvm2007 »

Thank You
Alan S.
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Re: Transfering from VG Rollover IRA to Merrill Traditional IRA

Post by Alan S. »

A rollover IRA is simply a traditional IRA that is sourced from a qualified plan and "rollover" is added to the title.

Such title is not conclusive due to custodian inconsistency in titling IRA accounts. There are many instances of an actual rollover IRA not including the title, and probably more cases of IRAs that are not rollover IRAs that still bear the title of "rollover IRA". I have one of these myself created by transferring an IRA that received many regular contributions into a legitimate "rollover IRA". It still includes the "rollover" title after this commingling.

There is also no consensus whether a bankruptcy court would approve a commingled IRA account to be allocated into portions funded by rollovers v. regular contributions for creditor protection purposes. Note that IRAs have creditor protection in or out of bankruptcy in almost all states, however in the majority of those states there are certain types of claims for which the protection is limited. Most of these limitations apply to domestic relations or child support orders, or for amounts rolled into the IRA shortly before filing for BK, or some states have dollar limitations.

Therefore, the importance of a rollover IRA varies by state and your potential creditors.

In short, there is no downside of having an IRA titled as a rollover IRA, but you may still have to prove that it actually IS a rollover IRA where large dollars are involved. CA is a good example of that.
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