You CAN roll a rollover IRA into your new employer?s 401k plan under certain very specific conditions.
1. The new employer?s 401k plan must specifically allow it.
2. Your IRA must contain ONLY former 401k monies, and not ANY money that you yourself have contributed. If they have ever been mixed at any time, that is called ?tainted? money and you cannot roll into the 401k.
3. If you do decide to roll the IRA into the 401k, DO NOT TAKE POSSESSION of the money yourself. Have the custodian (the brokerage) send the money to the 401k plan. This is called a custodian to custodian transfer.
?If you elect to open an IRA, keep the money separate or mix it only with other 401(k) or company-sponsored retirement fund money. That way, if you ever decide that you want to roll it back into a company-sponsored retirement plan, you have the option. Once you mix it with money that you?ve set aside apart from any employer plan, the money is considered tainted and can?t be reinvested in a company plan.?
4. Depending on what?s in your IRA, the broker might have to sell some or all of the assets before transferring them. Are they invested in things you want to keep? If so, it might be good to keep the IRA.
It is usually advantageous to keep the money in the IRA because your investment choices are greater. The downside is that, unlike a 401k, you can?t borrow money from your IRA. But you shouldn?t be doing that anyway, you should be leaving the money to grow for your retirement.
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