Part 2: Moving Your Retirement Money

Over the past 40 years, I have moved my investments around from one place to another including my IRAs. You are not required to keep your money in the same IRA from the time you open it to the time you start withdrawing your money. Yes, the IRS has a penalty for premature withdraws. But the law also provides flexibility for moving your IRA from one type of account to another account for instance, a Bank to an Online Brokerage Firm.  You may find that you can do better at a self-directed IRA buying Discounted Corporate Bonds giving 8% while at the bank you are only getting 1%. You now have over $1,000 saved.  So you transferred the account. We will talk about two ways to do this.

Direct Transfers are done between the IRA sponsor that you have now and the IRA sponsor that you want to handle your account in the future. You can transfer your accounts this way anytime you like but keep in mind, these sponsors may have fees for opening and closing accounts. The future sponsor sends the current sponsor a transfer form and the current sponsor sends them the money. I usually do this type of transfer. But this type of transfer could cost you money if done too many times. Sponsors usually have a small fee to do this transfer. 

Rollovers are a transfer that I do not recommend. If you do this type of transfer, you better do it within 60 days from the time you receive the money to the time you place the funds in a new IRA.  If you do not, it will be considered a premature distribution.  That means that it will be taxed as ordinary income and trigger the 10% penalty, assuming that you are under 59.5 years old. This type of transfer can only be done once a year for each account that you own. 

I own a regular IRA. That means that I take money from my paycheck, place it in my IRA and take deductions off my income tax. But when I am ready to withdraw the money and live off of it, I have to pay taxes on the money withdrawn.  

I could have opened a Roth IRA. Here, contributions are made with after-tax money. These people do not take a tax deduction at tax time. However, all earnings within the Roth are tax-free, not tax-deferred as it is with the regular IRA. Roth owners can withdraw money at any time without incurring a penalty or tax. Note that this rule applies only to your contributions, not  your earnings. If your account withdraws reach the point at which you are dipping into earnings, you may owe the penalty and tax if you are less than 59.5 years old. The tax and penalty are both waived on up to $10,000 of earnings withdrawn, after the account has been open for 5 years for the purchase of a first home.   

If you plan to live past 71 years old, you can continue to contribute to the account. There is no requirement that you begin withdrawing money from a Roth IRA at age 70.5 years old. If you wish, you can leave the money in your account until such time as death. If you die with a balance in your account, the money goes to your heirs tax-free. In a regular IRA, the beneficiary owes tax on the balance. If you earn less than $150,000, you qualify to open a Roth IRA.  

If you don’t know what type of IRA to open discuss it with your IRA Sponsor or your investment advisor.      

A Special Note for all my reader’s around the world!  

Hi my loyal readers around the world. I just finished making my final plans of my life. I will be retiring in a few short years and moving into my luxury retirement home. I will spend most of my time getting my seven year old grandson ready for the 2028 Olympics. I have no idea what my younger grandson is going to do. As of now, I would say it has something to do with electrical engineering because at 1 years old, he knew how to operate an IPad. But whatever it is, I will be around to lend assistance to his education.


My plans also involves my readers. I am starting an online stock club design to give my loyal readers as much as one million dollars, maybe more depending on when you start my plans. That money will be to remember me by.


Please read the blog below and follow my instructions if you want a chance to get one million dollars.
http://bondinvestments.blogspot.com/2012/06/how-would-you-like-to-have-over-one.html
The younger you are; 35 and below, the greater the chance of getting over one million dollars. If you are starting at 60 years old, chances are you will only make it to $100,000.



I started out at age 23 and spent a lot of time laid off and giving money away to my children for cars. I bought 3 homes. One home was paid off in full. The other I bought in a partnership paid in cash. All my cars since 1971 were the current year and I have not had a car note since 1983. I even gave two girlfriends a car each. That is why I don’t have a million dollars today. But if you become one of my “Greedy Friends” I am sure with my instructions, you can get that million.