I can't seem to find any bank or investment firm that will open an IRA rollover account with after-tax funds?

Any suggestions?

I left the company I was with & requested the funds (some pre-tax, some after-tax) in my 401k be directly transferred to an IRA account with an investment firm. The 401k company directly transferred most of it, but the after-tax funds were sent to me. Although I was told they could be "rolled over" into an IRA account also, the investment firm said most companies aren't set up to open IRA accounts where just the earnings are deferred & would be taxable, not the principal.. They said it's too complicated when it's time to withdraw?? This makes no sense to me....

You cannot intermingle "pre-tax" & "post-tax" dollars in an IRA, that would be a violation of tax law. But you can roll the 401(k) money into an IRA, and the after-tax dollars they sent you can be invested in a Roth IRA if you so wish.

The whole purpose of a "rollover" (which obviously was not relayed to you by the plan managers) is that the money goes from the 401(k) into a Regular IRA, and is never in your hands, so no taxes become due.

This article may help:

http://www.fool.com/investing/ira/2007/0...

The Roth IRA is an after-tax retirement fund. What exactly are you rolling over?
I'll have to plead ignorance. I'm not familiar with putting after-tax money into a 401(k), which is normally designed to be an income-deferral account.

Do you have a Roth option on your 401k? Most brokerages should be set up for that. You should be able to roll the after tax funds into a Roth IRA. Call up etrade.com. They are very accomodating.

This same thing happened to me because I forgot about a portion that was after tax. Depending on your age, and you don't think you'll need this money for awhile, read the restrictions on the Roth IRA. Time is not a consequence because its after tax. Look at low cost, no load mutual funds.
You will be taxed on dividends/capital gains, but in the long run it should pay better than the options given in a Roth.