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I rolled my last employer's 401k money into Putnam's Class B Mutual funds, being suggested by my Credit Union Investment Advisor. I just finished reading that you should never invest in these types of shares due to the cost....I did it before I discovered The Motley Fool! My question is..Can I move the money into a better Mutual Fund or a Roth IRA without being penalized or taxed?

Thanks in advance.

Jim
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Greetings, Jim, and welcome. You asked:

<<I rolled my last employer's 401k money into Putnam's Class B Mutual funds, being suggested by my Credit Union Investment Advisor. I just finished reading that you should never invest in these types of shares due to the cost....I did it before I discovered The Motley Fool! My question is..Can I move the money into a better Mutual Fund or a Roth IRA without being penalized or taxed? >>

I assume you transferred the money into a rollover traditional IRA. Thus, there is no reason you cannot further arrange for another direct transfer of those funds to another IRA using a better fund family or even to a brokerage to trade on your own. By doing so, you will not incur any taxes or penalty; however, because you're in a "B" fund, you will incur some charge by Putnam as its back-load.

As to a Roth IRA, you may also transfer your money to one of those, too. If you do so, you will be taxed on the amount so transferred, but there will be no penalty beyond the back-load Putnam will charge.

Regards..Pixy
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By doing so, you will not incur any taxes or penalty; however, because you're in a "B" fund, you will incur some charge by Putnam as its back-load.

As to a Roth IRA, you may also transfer your money to one of those, too. If you do so, you will be taxed on the amount so transferred, but there will be no penalty beyond the back-load Putnam will charge.


So, either way...I'm going to pay something. Is there any benefit to waiting then as the back-load charges decrease each year..from what I understand. Also does that the back-load charge go against the orginal amount only or the entire balance?
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Jim asks:

<<So, either way...I'm going to pay something. Is there any benefit to waiting then as the back-load charges decrease each year..from what I understand. Also does that the back-load charge go against the orginal amount only or the entire balance?>>

The backload is applied to the amount withdrawn, so in your case it would be against the market value at the time you close the account. Obviously, the less you pay in that regard, the more funds you will have to invest in something else.

Regards..Pixy
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