How does a Rollover IRA differ from a Traditional IRA?
The main difference is in the size of the allowable contribution. The most you can contribute to a Traditional IRA is $5,000 per year ($6,000 for individuals or each joint filer age 50 and over). With a rollover IRA, though, there is no maximum amount. You can rollover whatever pre-tax amount you receive from your employer’s plan – whether it’s $2,000, $200,000 or $2,000,000. And a rollover IRA offers the same tax advantages as a Traditional IRA.
