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> I have a Roth IRA that is not doing well. I am not 59.5 and I have not had it for 5 years. I want to move it into a Roth IRA in a different fund family, but I do not want to move it all at one time. If I move it into a Money Market account and then dollar cost average it into another fund, will I be considered "taking ownerhsip" of the fund? In other words, will I will be incurring an early distribution penalty? Thanks for any help you can give me. <

You are confusing the issues of "changing the investment option" chosen for your ROTH IRA funds with the issue of "taking distributions".

You don't have to take any distributions. If you want to change your investment option from one particular mutual fund to a money market mutual fund, you can do that without even changing your IRA custodian.
You do this by notifying your current IRA custodian of your change in investment choice.

If you want to change custodians, then you fill out a form (usually obtained from the new custodian) which direct the old custodian (your unfavorite mutual fund) to send (a portion or all) of your investments to the new custodian. You can instruct them to redeem the mutual fund and transfer cash. You can instruct the recieving custodian to invest the money into their money market fund untilyou instruct them to invest in a different mutual fund.

You can make the custodian-to-custodian transfer in one swell foop, or a bit at a time (although the latter seems like a rather drawn out and tedious process that may even incur some extra transaction fees)

The key words to inquire (with your newly selected mutual fund custodian) are "custodian to custodian transfer". You should NEVER have to ever take any distributions or ever take any direct control of the cash during this procedure of selling one fund, holding 'cash' in a money market, and rebuying into a second fund.

There are lots of useful information on transfers in the Taxes FAQ and Retirement investing FAQs here and probably also at At least I think there are.

- Danny
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