No. of Recommendations: 1
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 $13.1

0 to have this account is there anything I have missed.

Fooled again


I am just a reader passing by, but I think I can answer
your question. I had IRAs in multiple accounts in 1996 that
I transferred into a SEP IRA. There are no tax penalties
for doing this. One thing that can be confusing is to
differentiate between a transfer and a rollover. They are
not the same. A transfer is from one IRA account to
another. As far as I know there are no restrictions
involved as long as the money goes directly from one
account to the next. I _think_ a rollover is when you go
from an employer retirement plan account such as a 401k
and move that money to a regular IRA. Hopefully someone
who knows for sure will read this and confirm or deny that.
Anyway, my understanding of a rollover is that there is no
penalty as long as the money does not go to you during the
changing of accounts. It should go directly from the old
account to the new account, or you should receive a check
from the old account that is payable to the new trustees
(NOT payable to you). You then forward that check to the
new account. When done this way there is no tax penalty.

I hope this helps.
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