The Value of Keeping Rollover and Contributory IRAs Separate

[phantom]

I currently have a 2 Contributory IRAs at Schwab, a ROTH with $48k and a Traditional with $6k. I have a 401k from a previous employer that I want to rollover to Schwab. It has $21k ROTH and $44k Traditional.

My understanding is that if I keep the Rollover IRAs separate from the Contributory IRAs, I maintain the ability to roll that money back into a 401k with a new employer. I know there are some differences between 401ks and IRAs when it comes to distributions in retirement. But, I'm not clear on what those differences are or how much they matter.

The reason I'm tempted to combine things is that I see some value in the simplicity of having fewer accounts, fewer things to track, easier rebalancing, etc. I also have a 401k with my current employer, and 5 retirement accounts feels like a lot. My husband also has two Contributory IRAs, a Rollover IRA, and a 401k. So, that's 9 different retirement accounts between the two of us. Combining Rollovers and Contributories would get us down to 6.

My husband and I are in our mid to late thirties and plan on at least one of us working for at least another 20 years. So, we've got a long time before we'll be taking money out of any of these accounts. That's lots of time to maintain so many accounts and lots of time for the rules surrounding these accounts to change.

Any advice on deciding what to do?

[Petunia 100]

I currently have a 2 Contributory IRAs at Schwab, a ROTH with $48k and a Traditional with $6k. I have a 401k from a previous employer that I want to rollover to Schwab. It has $21k ROTH and $44k Traditional.

My understanding is that if I keep the Rollover IRAs separate from the Contributory IRAs, I maintain the ability to roll that money back into a 401k with a new employer. I know there are some differences between 401ks and IRAs when it comes to distributions in retirement. But, I'm not clear on what those differences are or how much they matter.

The reason I'm tempted to combine things is that I see some value in the simplicity of having fewer accounts, fewer things to track, easier rebalancing, etc. I also have a 401k with my current employer, and 5 retirement accounts feels like a lot. My husband also has two Contributory IRAs, a Rollover IRA, and a 401k. So, that's 9 different retirement accounts between the two of us. Combining Rollovers and Contributories would get us down to 6.

My husband and I are in our mid to late thirties and plan on at least one of us working for at least another 20 years. So, we've got a long time before we'll be taking money out of any of these accounts. That's lots of time to maintain so many accounts and lots of time for the rules surrounding these accounts to change.

Any advice on deciding what to do?

Those rules changed some time back. If an employer plan accepts rollovers, they will accept your IRA monies. If an employer plan does not accept rollovers, they won't. It doesn't matter if the contributions and rollover monies are mingled in a single account.

[phantom]

Those rules changed some time back. If an employer plan accepts rollovers, they will accept your IRA monies. If an employer plan does not accept rollovers, they won't. It doesn't matter if the contributions and rollover monies are mingled in a single account.

That's good news! Sounds like there's no reason not to just combine and simplify then.

[LivingAlmostLarge]

Keeping so many things means that if you want to do a backdoor roth it'll be hard. They calculate the numbers of what you have in a rollover and allow you to do a certain amount based on $ you are rolling.