moving from one fund to another in the same family
L1: moving from one fund to another in the same familyI currently have a 72(t) which is running smoothly, but I would like to move some of the money from that fund to another fund in the same family. Can I do that as long as I keep the withdrawals as originally calculated? If so, can I take it all from the same fund even though I will have moved some of the money to the other? There is ample money to go until the 59.5, 5-year minimum is met.
2010-11-12 21:17, By: statmanbill, IP: [22.214.171.124]
L2: moving from one fund to another in the same familyYou can do changes within the same mutual fund company, the same as you can buy and sell stocks at the same brokerage firm in the same account.2010-11-12 21:34, By: dlzallestaxes, IP: [126.96.36.199]
L2: moving from one fund to another in the same familyStart by reading this thread… http://72t.net/Forum/ForumViewDetails.aspx?R=df7d5a82-e4e0-4993-a315-c5d62edc311d
Then make the decision as to twhether you want to assume the risk associated with Partial Transfers.
The answer to the otehr part of your questions is that teh distrbution can be made from any (or all) the accounts associated with your SEPP plan.2010-11-12 21:35, By: Gfw, IP: [188.8.131.52]
L3: moving from one fund to another in the same familyGFW Isn’t that ruling for partial transfers to other firms ? He asked about switching funds in the same fund family.2010-11-12 21:44, By: dlzallestaxes, IP: [184.108.40.206]
L4: moving from one fund to another in the same familyA partial transfer is a partial transfer. If his IRA is sheltered by a custodial account where all money is covered by one account number, there is no problem making moved like the described. However, my guess is that the transfer of funds to a different mutual fund will results in a new additional account number.
If I was doing it and it was Vanguard, Fidelity, etc. I would do a 100% transfer to a brokerage account and then treat the different mutual funds options within the account as mere investments. No worries about the partial transfer implications. I would much rather be safe than sorry.
2010-11-12 21:59, By: Gfw, IP: [220.127.116.11]
L5: moving from one fund to another in the same familyThanks for the clarification. If that’s the case, I’ll have to double my efforts to get the IRS’ stupid interpretation changed to something intelligent.2010-11-13 02:32, By: dlzallestaxes, IP: [18.104.22.168]
L6: moving from one fund to another in the same familyThis situation shows how the IRA custodian’s account platform can restrict activity in a SEPP if you choose to be very careful regarding partial transfers.
Brokerage IRAs allow a maximum diversity of investments under a single account number. Some mutual fund companies may issue a separate IRA account number for each fund, although fund numbers are do not necessarily equate to a separate IRA account. Same potential problem with bank and CU CDs. You might end up with separate IRA account numbers for each CD, meaning that you may have a potential exposure when the CDs mature.
We have discussed before that we really do not know whether the IRS is equally concerned with just transferring part of an IRA to another IRA account or is also concerned with moving an entire IRA account when the SEPP is composed of more than one IRA in the universe. 2010-11-13 04:35, By: Alan S., IP: [22.214.171.124]
L7: moving from one fund to another in the same familyWell, I’ve finally read through all of my backlog of 72(t) posts after my week in the Smokie Mountains, and I wish I had read this one first. Here’s my take on the situation.
I am not aware of ANY mutual fund family that still uses different account numbers for each mutual fund that is titled as a TIRA. To the best of my knowledge ALL mutual fund families uses one unique account number for each TIRA. They DO use separate Fund Numbers for each named mutual fund, but all have the same ACCOUNT NUMBER. Activity within the TIRA Account is reported under the ACCOUNT NUMBER without regard to the FUND NUMBERS. So you are free to exchange from one fund to another or multiple funds within that family.
For example, 3 funds in one TIRA would be like this:
Money Market Fund: 0123-100123456
Growth & Income Fund: 0158-100123456
Large Cap Growth Fund: 2298-100123456
Using one fund family has the sameeffectas if you had a brokerage account TIRA and funded it withfunds from the same or different fund companies:It’s one account number with different investment vehicles.
Now if you have a TIRA and a Roth IRA, each will have different ACCOUNT NUMBERS. However, if you use the same mutual funds in both accounts, the FUND NUMBERS will be unique to each mutual fund with the account number as the extension, as in my example above.
Jim2010-11-23 21:24, By: Jim, IP: [126.96.36.199]
L8: moving from one fund to another in the same familyBefore making any moves, I would definitely contact the fund company involved and verify in writing that…
All funds within the same family use the same IRA account number; and
That all reportingto the IRS for all funds is done using one account number;
2010-11-23 21:29, By: Gfw, IP: [188.8.131.52]