Maxxing out Contributions outside TSP

[bamafamily]

Good Morning All,
New to this side of the board...I have a question on maxxing out contributions.

I am 50 yrs old
I am currently maxxed out in my TSP account (plus catch-up)
I have a Rollover IRA with Fidelity that I am not contributing too
My MAGI looks to be too high to get deductions for a traditional IRA

Based on the above, it looks like the best course of action is to open a Roth IRA
Based on reading posts on this board, it looks like opening an external one is the better choice. (Fidelity??)
I really wanted to contribute the extra to my Rollover Account so I would only have to manipulate one and not two....
I also am not sure if I can co-mingle funds in my rollover account (current pre tax money plus adding post tax money)

Any ideas????

thx
Bama

 

[burrocrat]

Any ideas????

thx
Bama

don't get married...

 

[bamafamily]

don't get married...

Too late....lol

 

[alevin]

Hi Bama, I'm thinking you can comingle nondeductible (post-taxed) contribs in your rollover IRA, it just gets complicated on withdrawals later. I have a longtime small trad IRA that was mostly deductible, but then I put some non-deductible funds into it later, before I quit contributing to outside IRA entirely and started putting everything into TSP. I moved some of the commingled trad IRA out into starter conversion Roth back around 2002, had to figure out the deductible vs. nondeductible ratio and pay taxes on the deductible portion, to establish the conversion Roth account. and will have to do the same every time I pull any out of the trad IRA that still exists, until it's fully depleted.

You might have to keep track of 2 accounts (Roth and Rollover), but it could still be simpler than having commingled, when it comes to withdrawals from single commingled account later.