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Author: Canth Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 79743  
Subject: Re: I Need some Help Date: 10/12/1999 9:47 AM
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I have an IRA with General American for some years now. Since it is only earning a 6% interest, I have been advised to draw the money, pay the penalty and invest it some other type of IRA with companies earning at least 10% to 12% interest. I would have to pay the penalty which I have not found out yet, but was told it would be about $2000. or more. I am also told I would
make it back within the year. Should I just leave it there making 6% or do the chances of recovering the money lost for the penalty ok? Please reply,


If you are transferring from one IRA to another there are no Tax consequences or penalties. There may be Load fees charged by the fund (Great American) and If your IRA is in the 100,000 range a $2000 load fee would probably be in line (2%) depending on How long you have been in the fund so far. If this is close to your situation then yes you should be able to recover from the backload/penalty within the year.
If your IRA is in the 5000/10,000 range and the $2000 is penalty and income tax on the mone then no you probably will not recover the money but doing a IRA > IRA transefer would not have those consequences.
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