Can I change my Roth into a normal account?

Question

I have am utual fund that is also designated as a roth IRA. Is it possible to eliminate the roth tag to the fund and just let it serve as a basic mutual fund account? Would there be fees to do this?

Answer 1

You apparently have no idea that the ROTH IRA is the best thing out there! Once you can take distribution you'll never pay taxes on any principal or increase in the account (fund).

You goal should to be to open a ROTH IRA every year to the max allowed by law. Anything else is just plain stupid. (not trying to be nasty... just trying to make a point).

Answer 2

Why would you want to? With the Roth, you are already contributing after tax dollars to your account. Your earnings are tax free and when you withdraw funds, they are tax free. If you take distributions before age 59 1/2, you will be subject to Sec 72(t) tax (10 percent early withdrawal) on the amount in excess of your basis (contributions).

You might as well just quit contributing to the Roth and begin contributing to your mutual fund account. This will allow you to avoid the penalties and still be able to grow your Roth tax free until age 59 1/2. Even if you stop contributions, it could be a sizeable account if you are young.

Answer 3

Whether or not you have to pay brokerage fees depends on who your broker is and what their policy is for account transfers. There will be a 10% tax penalty unless you have held the roth ira for 5 years and one of the following:
1. your age is over 59.5
2. you are disaabled
3. it is being used to help buy your first home

Answer 4

If you distribute from a Roth account before it is five years old you will pay tax on the earnings plus a penalty. If you do this after five years you will pay a penalty.