Subject: Retirement Plans - Co-mingling funds in IRA accounts

Last-Revised: 19 Feb 1998
Contributed-By: Art Kamlet (artkamlet at, Paul Maffia (paulmaf at

The term "co-mingling" refers to mixing monies that were saved under different plans within a single IRA account. You may co-mingle as much as you want within your IRAs. Although the bookkeeping is not a problem, there are disadvantages; one example is discussed below. Remember that you can have as many IRA accounts as you wish, although there are strict limits on contributions to IRA accounts; see the FAQ article on ordinary IRA accounts for more details.

The most common situation where co-mingling becomes an issue is if you have what is known as a "conduit" IRA. This happens if you change employers, and in doing so, move monies from the old employer's 401(k) plan into an IRA account in your name. If the IRA is funded with only 401(k) monies, then it is called a conduit IRA. Further, if a later employer allows it, the entire chunk can be transferred into a new 401(k).

Of course you can mix (co-mingle) the conduit monies with monies from other IRA accounts as much as you want. The major disadvantage of co-mingling is that if your 401(k) monies get co-mingled with non-401(k) monies, you can never place the original monies from the old 401(k) back into another 401(k). You may also want to read the article on 401(k) plans in the FAQ.

Hre's a summary of the issues that might motivate you to maintain separate IRA accounts:

  1. Legitimate investment needs such as diversification.
  2. Estate planning purposes
  3. With passage of the new tax law, to keep your Roth IRA money separate from regular IRA money and/or Education IRA money.
  4. And of course to keep 401K rollover monies separate if you want to retain the ability to reroll as noted above.

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