Rollover pension into IRA after maxing 2018 contribution

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amateurnovice
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Rollover pension into IRA after maxing 2018 contribution

Post by amateurnovice » Sat May 05, 2018 4:13 pm

I've recently quit a state government job and I will be taking the refund of my pension. I have both a traditional IRA and Roth IRA with Vanguard. I've already maxed for 2018. Can I still roll over the pension funds since they were tax deferred into either of those IRAs?

retiredjg
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Re: Rollover pension into IRA after maxing 2018 contribution

Post by retiredjg » Sat May 05, 2018 4:28 pm

A rollover does not affect contributions. And vice versa.

I suppose (don't know for sure) you can roll to either IRA, but if you roll to Roth IRA, taxes will be due on the entire amount at your marginal tax rate. Probably not a great idea in most cases.

amateurnovice
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Re: Rollover pension into IRA after maxing 2018 contribution

Post by amateurnovice » Sat May 05, 2018 5:15 pm

retiredjg wrote:
Sat May 05, 2018 4:28 pm
A rollover does not affect contributions. And vice versa.

I suppose (don't know for sure) you can roll to either IRA, but if you roll to Roth IRA, taxes will be due on the entire amount at your marginal tax rate. Probably not a great idea in most cases.
Ok, so I should be able to roll it over to my traditional IRA even though it's been maxed? Right?

retiredjg
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Re: Rollover pension into IRA after maxing 2018 contribution

Post by retiredjg » Sat May 05, 2018 5:46 pm

Yes. If it is eligible to be rolled into a traditional IRA, the maxing of your IRA part is not relevant.

amateurnovice
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Re: Rollover pension into IRA after maxing 2018 contribution

Post by amateurnovice » Sat May 05, 2018 6:49 pm

retiredjg wrote:
Sat May 05, 2018 5:46 pm
Yes. If it is eligible to be rolled into a traditional IRA, the maxing of your IRA part is not relevant.
Thank you, I'm stoked about that.

fabdog
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Re: Rollover pension into IRA after maxing 2018 contribution

Post by fabdog » Sat May 05, 2018 6:54 pm

In order to keep things clean in case you ever need to roll that money anywhere else, you may want to open a separate Rollover IRa to hold those funds, vs your current contributory IRA

Mike

amateurnovice
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Re: Rollover pension into IRA after maxing 2018 contribution

Post by amateurnovice » Sat May 05, 2018 7:01 pm

fabdog wrote:
Sat May 05, 2018 6:54 pm
In order to keep things clean in case you ever need to roll that money anywhere else, you may want to open a separate Rollover IRa to hold those funds, vs your current contributory IRA

Mike
What do you mean by "keep things clean in case ...."?

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Earl Lemongrab
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Re: Rollover pension into IRA after maxing 2018 contribution

Post by Earl Lemongrab » Sun May 06, 2018 2:48 pm

amateurnovice wrote:
Sat May 05, 2018 7:01 pm
fabdog wrote:
Sat May 05, 2018 6:54 pm
In order to keep things clean in case you ever need to roll that money anywhere else, you may want to open a separate Rollover IRa to hold those funds, vs your current contributory IRA
What do you mean by "keep things clean in case ...."?
Even though the law no longer requires it, some company plans will only take rollovers in if they are from rollover IRAs with a clean record (no other contributions). If you need to roll the funds to clear the way for backdoor Roth or just because you want to have the money in a 401(k) or whatever, then it might be a factor.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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abuss368
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Re: Rollover pension into IRA after maxing 2018 contribution

Post by abuss368 » Sun May 06, 2018 2:57 pm

A rollerover or direct transfer does not impact contributions. These are two entirely different points. I would simplify everything and roll into your Traditional IRA. Once that is completed, you have begin to evaluate the possibility of converting to a Roth IRA.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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