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Roth 401(k) rollovers — mystery and opportunity

According to the Investment Company Institute, 59 percent of existing traditional IRAs are comprised in whole or part of assets rolled over from a corporate retirement plan.

By Christopher Carosa | Updated on September 01, 2017

According to the Investment Company Institute, 59 percent of existing traditional IRAs are comprised in whole or part of assets rolled over from a corporate retirement plan. Significantly, 82 percent of the households with rollovers said they rolled over their entire account in their last rollover. It’s odd, then, to discover that only 1.9 percent of Roth IRAs created in 2015 came from rollovers.

We’ve had two generations now for the rolling over of 401(k) retirement assets into personal IRA accounts to become accepted custom. Roth IRAs, which started 20 years ago, didn’t have a 401(k) equivalent until a decade ago. The concept of rolling over retirement assets into a Roth IRA is therefore relatively new. Still, one would think it would follow on the coattails of the traditional IRA rollover. It hasn’t.

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Christopher Carosa

Christopher Carosa

Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).

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