Three months ago, I rolled a 401k into an existing IRA which already had monies in it. I now read that one should keep these separate and not comingle! Since I have deposited the monies, I have also purchased stocks and mutual funds with some of those monies, and I can't distinguish the monies. What does one do now? Does it really matter as 401k will all be after tax by definition?

[This message has been edited by SusanS (edited 03-28-99).]

If the existing IRA was a traditional, tax-deductible IRA, it may not matter.

Where comingling monies is a problem is conversion Roths and contributory Roths because the sources of the funds are different and subject to different provisions on early withdrawals etc. Also tricky is mingling deductible with non-deductible monies.

Check out the IRS's own website. http://www.irs.ustreas.gov/prod/forms_pubs...bs/p5900106.htm

There may be other IRS publications that answer your question more directly. Go to the "Search" icon of the IRS website and ask for "retirement plans". (It is confused by "401(k)".)

Otherwise, ask the custodian of your IRA. Some have 800 numbers for questions on retirement plans etc.

Good luck

Susan,
You can either roll your qualified plan money into your regular "contributory" traditional IRA or into a "Conduit or Rollover" IRA. The reason why some people want to roll their qualified plan money into a Conduit IRA and not commingle it with contributory IRA money is because, if they do that, they can roll it back into another qualified plan in the future. Some people see this as and advantage because you can borrow from a qualified plan but not from an IRA and some qualified plans have investment options with lower expense ratios (institutional investment options) than are available to the average investor. If you roll your qualified plan money into your regular IRA to which you also make contributions, you no longer have the option of rolling that money back into a qualified plan in the future. Many people do recommend maintaining two separate traditional IRAs for this reason but it is not required and sometimes not worth the additional fees and paperwork.
Kathy