Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next
Author: DowDanny Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121146  
Subject: Re: Roth IRA Moves Date: 1/31/2000 11:13 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
> 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 www.fairmark.com. At least I think there are.

- Danny
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement