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I am single and used to contribute to a Roth IRA (my last contribution was years ago), but now my AGI is over the limit to contribute to the Roth.

I have a "rollover IRA" that I opened a few years ago, into which I rolled over a previous 401k's funds. Now, I would like to start contributing to an (any) IRA again, so I think I would need to open a traditional IRA. I cannot take a pre-tax deduction to any IRA contribution since my AGI is high.

Is there any difference between the rollover IRA and the traditional IRA? I would prefer not to have to open yet another account, so adding my yearly ~$5500 to the rollover IRA would be great.

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  • Just to clarify, you are planning on making a non-deductible Traditional IRA contribution? And not doing an immediate Roth conversion because of the existing pre-tax IRA money?
    – Craig W
    Mar 4, 2014 at 21:05
  • @CraigW: "And not doing an immediate Roth conversion because of the existing pre-tax IRA money?" From my understanding, doing a conversion to Roth is advantageous if your tax rate is expected to be higher in retirement. My current tax rate is extremely high right now, and I expect it will be lower in retirement; thus, I do not want to do a Roth conversion.
    – stackoverflowuser2010
    Mar 4, 2014 at 22:22
  • @CraigW: "you are planning on making a non-deductible Traditional IRA contribution?" That's right. I contribute to a 401k at work, and my AGI is over $70K, so I cannot make a deductible traditional IRA contribution. I am following the guidelines at: taxes.about.com/od/deductionscredits/qt/traditional_ira.htm
    – stackoverflowuser2010
    Mar 4, 2014 at 22:25
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    This is really a separate issue, but note the value of a non-deductible Traditional IRA is quite limited. The tax rate now versus in retirement argument only holds when you are getting a deduction. I would strongly advise you to see if you can "roll-in" your rollover IRA to your current 401(k), then do a backdoor Roth IRA contribution.
    – Craig W
    Mar 4, 2014 at 22:31
  • @CraigW: "The tax rate now versus in retirement argument only holds when you are getting a deduction." Can you point me to more info on this subject?
    – stackoverflowuser2010
    Mar 4, 2014 at 23:06

3 Answers 3

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It is possible that some rollover IRAs (from a 401k for instance), can in future be rolled into a new employer's like-kind retirement plan. If you are able to contribute to this IRA in the intermittent time frame, it may no longer qualify for the future rollback because it contains commingled funding.

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    The rules requiring such segregation are long past. Your answer is good for receiving company that remains unaware.
    – JTP - Apologise to Monica ♦
    Mar 4, 2014 at 19:28
  • So you are now allowed to comingle rollover and personal IRA funds? I guess I haven't tried recently.
    – Alex B
    Mar 5, 2014 at 13:57
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My rollover IRA custodian emailed me this information a few years ago:

The IRS now says that a Traditional IRA and a Rollover IRA are the same account and follow the same rules. This means that you could make a contribution to your Rollover IRA. The only issue you may run into down the road (and it has nothing to do with the title of the account) is that if you ever want to roll your 401k funds back into a 401k, the plan administrator has the right to deny those funds if you have contributions mixed in with the original 401k funds. Most will not, but they have the option that they could. If you have any doubt about this, I would suggest opening a separate Traditional/Rollover IRA to make contributions to.

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Rollover IRA is a "marketing term" created by the financial industry. A rollover Ira is a traditional ira. The tax treatment is what matters.

You can "rollover" funds from a 401k into a traditional ira or rollover ira, it makes no difference.

You can contribute to the rollover/traditional ira if you MAGI is to high and just wont be able to claim the deduction. You did get the tax deferred growth. After contributing you may want to consider a roth conversion (consult your tax adviser- This is a gray area form IRS treatment which hasn't been ruled on. ) as you arn't really getting any tax deduction benefit from the traditional ira so you can at least get tax free growth in the roth.

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