If it has to go over a separate rollover account, can the rollover and the traditional IRA then be merged into one account?
Yirmiyah- So that tells me that if I rollover the 401k that I wouldn’t want to merge the traditional with the rollover. Probably couldn’t anyway. Rollover sounds much better

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My mother, who is 65 years old, took 0,000 out of her traditional IRA in 2011. Because she needed the money for some personal project.

However, now she worries about paying income taxes on this 0,000. Please provide any idea or guide to reduce her taxes.

Thank you in advance.

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Considering converting some funds from my Traditional IRA to a Roth. I know I will have to pay taxes on it. Can I take a lump sum from the Roth at 59 1/2, without any penalties or taxes? For example a lump sum to pay my mortgage off.

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This is yet another post I am making about one of my favorite topics, investing. We know that a traditional IRA is tax deferred yet will have taxes paid on it during retirement. A Roth IRA grows tax free and has tax free withdrawals pending certain conditions met. But why a traditional? There are some that argue that taxes are going up, which is probably true. Personally, I like both types of IRAs. With a Roth, you pay current income tax on contributions that have not even made any earnings yet. That alone will tend me to favor tax deferred traditional. A traditional IRA will earn more over time with the power of compounding without the hassles of annual taxes hitting it. Like I said before, why not get a low low paying job after you leave your main job so that you are now in a lower tax bracket? Instead of maybe 25% tax on withdrawals, now you will only pay 10-15%. See the difference? All that money has grown without annual taxes. Now pay as little as possible on earnings.
See what I mean? Why pay 25%(more or a little less) now on contributions that haven’t made any earnings instead of say, 10-15% later on while you are in a lower tax bracket? Makes sense to me. Don’t be so quick to run a Roth. If possible, contribute to a 401 k, 403b and so on and possibly a Roth IRA to be diversified. Like I said, I like both. I just tend to be biased towards tax deferred. I would rather pay taxes on what I’ve made. You wouldn’t pay income tax at your job before you’ve earned any money, would you? This is basically for those who don’t have an employer sponsored retirement program.

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Considering converting some funds from my Traditional IRA to a Roth. I know I will have to pay taxes on it. Can I take a lump sum from the Roth at 59 1/2, without any penalties or taxes? For example a lump sum to pay my mortgage off.

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I have a Roth IRA, which I max out every year including this year. I also have an old 401K with a previous employer. I read that I can’t roll over the 401K into my Roth, but can I roll it over into a new Traditional IRA when I already have an existing Roth IRA?

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There seem to tax benefits in 2010 for putting money into a traditional IRA that I can later roll into a roth IRA. So, can I take the 401K that I have with a former employer and roll it into both a 401K with my new employer, and deduct 4,000 of that to put into a traditional IRA? Thanks so much for your help!!
Sorry, to clarify….can I roll over into both of them? Like most of the money into a 401K and some of the money into the traditional IRA?

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i just got a new job and have a little more than 10,000 i’d like to rollover…i’m hoping to use some of this money to buy my first apartment. i’d also like to have the option of being able to take money out should i have a major emergency. should i invest in a roth ira as opposed to a traditional ira?

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I just quit my job and I’ve got some money in a 401k plan. It’s under 500 dollars and with that I want to open up an IRA. Do I open a Roth or a traditional IRA? I’m 21 years old.

Also, where is a good place to open it. Chase, Bank of America?

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I have 00 in a Traditional IRA. I was considering rolling it over into a Roth IRA because of the fact that I plan on using that money toward the purchase of my first home. If I do roll it over, will that cost me more in taxes than it would to just keep my money in the Traditional IRA and then withdraw it when I purchase my first home?

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I have a money market IRA that was converted from a Roth IRA over 2 years ago. I didn’t like the rate I was getting in the Roth and converted to the money market, but now I am unhappy with the return I am getting on the money market IRA. Is my money market IRA considered a traditional IRA? I’m 27 and would like to withdraw approximately 3,000 for something that would not qualify under any of the exceptions. Will I end up paying the 10% early withdrawal fee and will the 3000 be considered income?

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This is my scenario. I currently have a ROTH IRA. For this and next year I would like to take out a traditional IRA, and in a few years (2010) convert this to my current ROTH IRA. I had read somewhere I thought you can only do a rollover like this one time. Does anyone know the rules on this? Thanks!
Thanks for the answers. I know it’s kind of tricky. I would rather get the tax break now and pay the taxes in a couple of years because of my financial situation. But i would want to do it all at once. For example, rollover the total of all my traditional IRAS into my existing ROTH. Don’t mind paying the taxes at that time, but dont want it counted as a withdrawl and get penalized, etc. I eventually just want it all in one account. I’m just scared there is a catch somewhere ( or will be in 2 or 3 years). Several years ago, they let you do that rollover thing all at once, and I did do it at that time.
To the last response from TBONE. You mentioned in 2010 you can rollover a traditional ira into a roth ira…this is the whole crux of my concern…I know I can roll it into "an IRA" but can I roll it into "an existing IRA" that I had before i started opening up the traditional iras?
Thanks!

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I have make less than 0K a yr. I opened a traditional IRA using a 401K rollover from an old job. I also created a Roth IRA. Can I make contriubutions to both IRA’s? The max on both is K. Can I place K total into these accounts?

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My income will likely make me ineligible to contribute to a Roth IRA after 1-2 years, at which point I plan to contribute to a traditional IRA. Should I just open a traditional IRA now? Or contribute to a Roth as long as I can? When I open a traditional IRA will I have to convert my Roth? How should the temporary removal of the upper income limit on 2010 affect my decision?

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I live in the US and am 41. Also, my wife has a traditional IRA but I would like to open and max our both a roth and traditional IRA for her as well.

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