I am in my early 30s and I have recently rolled over my 401(k) fund from my former employer into a Traditional IRA account. All the money in this account is pre-tax income.
I would like to contribute to this IRA account, but have few questions regards to this contributions:
- If I contribute to this IRA account, isn't the newly contributed amount get mixed up with my rolled over pre-tax 401k money with after-tax contributions (via bank deposit)?
- If this traditional IRA account allows me to deposit pre-tax income, how can I do that? Should I request my employer to deposit some 5% pre-tax money into this account? (might not be, as employer sponsored would be 401(k))
- I understand what ROTH account is and how it works(we contribute after-tax income). But how we can differentiate traditional IRA with ROTH IRA, as it looks like, contributing would come from our after-tax income for both types?
I am puzzled with this, as no source has answers for all of these questions. Any insights would be really helpful.