Should I transfer my mutual funds into IRA's?

Question

I have 2 mutual fund accts that I have had for 10 years and I have lost money on these accounts. I was wondering if I should transfer these into IRA's would I save more money this way? Will my account grow in an IRA better?

Answer 1

If your mutual fund has performed poorly in the past 10 years, then it may be a wise choice to liquidate them all. I would speak to a financial professional on figuring out the appropriate mutual funds that can meet your investment objective.

If you put these mutual funds into the IRA, the only difference here is that any gains, interests, and dividends that you use to receive will now be re-invested into the mutual funds and you don't pay taxes on them. But it won't affect the rate of return on the mutual fund. Since you say that your mutual funds has been performing badly since the time you opened it, I would not put these mutual funds in the IRA. Instead, I would look for other mutual funds that has perform well in the past 10 years such as Legg Mason Partners Aggressive Growth Fund, which has an average rate of return of 14%.

Answer 2

An IRA is just a type of account (like "joint" account versus "individual" account). The investments in an IRA determine how much money you make. You can hold cash, mutual funds, individual stocks, bonds, or any other investment vehicle in an IRA. The difference is that you don't pay taxes on any gains in an IRA, so you'll end up with more money if you own a fund in an IRA than if you own that fund in a regular taxable account.

The mutual funds you have are poor performers, so you should sell them and buy something else. It is a good idea to put that money into an IRA though if you don't have one. Over time your money will grow faster becuase you're not paying any taxes on the gains. But you can't/shouldn't take it out until you reach retirement age.

Answer 3

No, being in an IRA does not really make the money grown much better.

Sort of.

If the mutual fund realizes gains or dividends, the IRA is better because you won't have to pay taxes now. You pay taxes when you retire (and presumably will be in a lower tax bracket).

An IRA will NOT, however, do much to improve how well the investment itself performs.

You should put the money into a IRA (and do your homework to pick a good fund) if you don't plan on needing the money until retirement. If you have your emergency fund and money that you'll need for your pre-retirement future, then you might as well stash it away. However, what money do you plan to use for college for the kids? To buy a new car? To upgrade to a bigger house? To take vacations?

Answer 4

Well, you should put the max into some IRA every year ( if you can).....but it will not change your poor returns ( LOSS !!) unless you change your funds.....
So, the answer is : YES get out of those funds.... and YES, put $ 4000. into an IRA.... but do it in such a way that YOU control where the money in the IRA is invested. Go to E-trade, or Fidelity...somewhere where you can open the account ( IRA) and choose a nice "global balanced fund" ( investing your money conservatively in all markets..so that the "good years" and "bad years" sort of balance out)
Then, open a regular " brokerage account" and invest whatever is left in mutual funds that you select.... go to finance/yahoo or moneycentral/msn..compare some funds for performance, holdings, rating, etc.....you've got to get into something profitable.
Kiplinger's just put a 2007 mutual fund report out...look for it at a good magazine rack..( lots of info !!)
If you DO get set up...on-line, hopefully, remember to check on your accounts every 3 or 6 months...and if you've picked losers...make some moves....it's YOUR money...MAKE IT WORK for your future.
This all sounds like a lot of work or trouble...but it's not..please try it..it can become second nature to look at things and a sense of accomplishment when you see that YOU are making things work.

Answer 5

Can't do that. Ira must be started with fresh money or 401k transfer or the like. Should start an Ira but do it buy selling the funds & using the cash. Surprised funds held 10 yrs doing that badly. Remember to buy no loads, etfs, & Closed ends. Adx, Peo, Swinx, Efa, Pgj & the like. schwab.com best place to get them all.

Answer 6

you can try but you can only put so much into a ira each year, it might be better if you withdraw some and put it into a ira you will also have a capital loss you can claim, on next year taxes.