On Wed, 30 Apr 97 11:55:03 -0600, nasche wrote:<<Question from a newbie. I have just figured out at 31 years that I need to invest if I am going to have any life in retirement. So happy I found TMF. I am now completely Foolish. My cash is quite tight right now. I have $1000 to invest. I would like to place it in Vanguards IRA (the S&P 500 index) but am woried that when my cash is up to say $5000 that I won't be able to roll over to a self directed IRA without getting hit with the penalties. Any experience from the Fools. Also it will cost me $13.10 to have this account is there anything I have missed.Fooled againDarren>>Darren, I am just a reader passing by, but I think I can answeryour question. I had IRAs in multiple accounts in 1996 thatI transferred into a SEP IRA. There are no tax penalties for doing this. One thing that can be confusing is todifferentiate between a transfer and a rollover. They arenot the same. A transfer is from one IRA account toanother. As far as I know there are no restrictionsinvolved as long as the money goes directly from one account to the next. I _think_ a rollover is when you gofrom an employer retirement plan account such as a 401kand move that money to a regular IRA. Hopefully someonewho knows for sure will read this and confirm or deny that.Anyway, my understanding of a rollover is that there is nopenalty as long as the money does not go to you during thechanging of accounts. It should go directly from the oldaccount to the new account, or you should receive a checkfrom the old account that is payable to the new trustees(NOT payable to you). You then forward that check to thenew account. When done this way there is no tax penalty.I hope this helps. Tom
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