Can I move the money in my Roth IRA?

January 16, 2004

Subject:  Roth IRA Loss
Date:  Wed, 31 Dec 2003
From:  Vic

Michael:

I have searched the internet high and low with various keyword searches and was delighted to find your feedback page on this subject. As many others, I have experienced a substantial loss on a Roth IRA investment in a mutual fund. I have lost confidence in the fund management and want to redeem the residual amount. I wish to put the money in another investment, keeping it classed as a Roth IRA. How can I do this?

Thanks in advance for your advice.

Vic

Answer

Date:  Wed, 7 Jan 2004

Hello Vic,

The best way to transfer the Roth account is a trustee-to-trustee transfer. Decide where you want to transfer the new account. Then talk to representatives at both companies to discuss their procedures to accomplish the transfer.

Alternatively, you can rollover a Roth distribution, just like you can for a regular IRA. You receive a cash distribution from one account and deposit the proceeds within 60 days to the new rollover account. When you make a rollover, you have to wait more than one year before doing it again.

Since you have a loss on the account, consider just distributing the account without making a rollover. You can claim a miscellaneous itemized deduction for the loss. (But watch the limitations for miscellaneous itemized deductions!)

Good luck!
Mike Gray

For more information about Roth and traditional IRAs, buy our book: How to use Roth & IRA accounts to provide a secure retirement, 2012 Edition!

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