Feb 28

Say that I open up a Roth IRA with Fidelity in 2005 and fund it with the maximum for the year. Then I open up a new Roth IRA in 2006 with Ameriprise and fund that with the max for 2006. Can I combine the two accounts? Are there any penalties or disadvantages to doing this?

2 comments so far...

  • Teetana Said on February 28th, 2010 at 11:43 am:

    You can definitely combine the IRAs without penalty. Decide which one you’d like to keep, and contact the other provider and let them know you will be transferring funds into the other one. They will provide you the proper Distribution paperwork and instructions on how to initiate the transfer.

    I recommend finding out which one has higher annual fees as well as higher management fees and close that one. (There should be an 800-number somewhere for you to get help on these questions)

    Good luck!! Remember to diversify your holdings!

  • Gary E Said on February 28th, 2010 at 11:59 am:

    If you’re planning to move your assets from one brokerage house to another; ask the one that will be getting all of your business for their advice and follow it. If you can’t do that you shouldn’t be with that brokerage house.

    Commenting on the first answer:
    Although expenses are definitely significant, the bottom line for a Mutual Fund (or any investment) is its performance. Simply put, I would invest in a fund that had exorbitant fees if I were convinced it would net me 12% per year over the long haul; before I would invest in a very low fee fund that I would expect to net me less than 5%.

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