Rollover IRA Contributions

Amounts and timing of contributions.

This material is intended as general information only and is not intended as legal or tax advice. Some of this information may be quite complex and we strongly suggest you consult with your advisor or tax professional based on your individual situation.

What are the Rollover IRA contribution limits?

Rollover IRAs are designed to receive contributions from qualified plans so you can avoid current taxation. The dollar amount a rollover IRA may receive is equal to the individual retirement funds available from the qualified plan.

Can I combine a rollover IRA and an IRA receiving annual contributions?

You can combine rollover and contributory IRAs in the same account. However, you are required to keep traditional IRA and Roth IRA money (rollover or contributory) in separate accounts. An advantage to keeping a rollover IRA (traditional or Roth) separate from a contributory IRA occurs should you ever declare bankruptcy. Contributory traditional and Roth IRAs are exempt from bankruptcy up to the first $1 million, while rollover IRAs (traditional or Roth) have no cap. Combining the accounts, in the event of a bankruptcy, could cause you to prove what money belongs to the contributory IRAs and what money belongs to the rollover IRAs.

How do rollovers affect contribution or deduction limits?

Rollover IRA contributions do not count toward the maximum IRA contribution limit. Since rollovers simply defer taxation, they do not affect whether or not your IRA contribution is tax deductible. (See "Traditional IRA Eligibility" regarding deduction rules.)