Question : Can I "rollover" my tax shelter to a mutual fund when I am 59 1/2?
- asked by pomelosranch
All Answers:
Answer #1
At age 59 1/2, withdrawals can be made from manytax sheltered accounts, such as IRA's, "withoutpenalty". However, depending on the type ofaccount, there may be taxes due ( in this casetaxes are technically not called a penalty). Witha Roth IRA, there is no tax due on withdrawals andyou can reinvest the funds wherever you like. With a traditional IRA, tax is due on thewithdrawals. Also, your" tax shelter" may alreadybe in a mutual fund. If you are wanting to moveyour tax sheltered funds from one investment toanother, it is possible to do that in many caseseven before age 59 1/2.
- answered by oakhill
Answer #2
You can, but why would you want to? Yourretirement fund will continue to earn $$$ withouttax until you withdraw it. If you roll the wholething into an ordinary mutual fund all at once,you'll have to pay tax on the whole thing AND thesubsequent income would be taxed every year evenif you didn't withdraw it.If you are in asituation where you must withdraw more than youactually need, dumping the excess in a relativelylow risk mutual fund would be a good idea,however.
- answered by bostonianinmo
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