Please verify this for me..

[bizlady]

I need some reassurance!

We are not yet 59.5

If we have money in an IRA, and sell some mutual funds and transfer and invest that money to ANOTHER IRA money market fund, that is NOT a taxable event? Right?

We want to position ourselves as we get closer to that date, and like to have 2 years expenses in cash. Since we may sell our home and build a patio home next year, and since the market is where we think is reaching peak, we think now might be the time....

 

[FinanceDude]

I need some reassurance!

We are not yet 59.5

If we have money in an IRA, and sell some mutual funds and transfer and invest that money to ANOTHER IRA money market fund, that is NOT a taxable event? Right?

We want to position ourselves as we get closer to that date, and like to have 2 years expenses in cash. Since we may sell our home and build a patio home next year, and since the market is where we think is reaching peak, we think now might be the time....

If it is IRA to IRA, NOT a taxable event. If it is Roth IRA to IRA, it IS a taxable event...........

 

[steelyman]

Yes, it is not taxable if you do it right.

You want a "trustee to trustee" transfer between the companies holding the funds. Just give them a call and find out how they do it.

 

[Alan]

If it is IRA to IRA, NOT a taxable event. If it is Roth IRA to IRA, it IS a taxable event...........

Don't you mean that IRA to ROTH IRA is a taxable event?

 

[bizlady]

If it is IRA to IRA, NOT a taxable event. If it is Roth IRA to IRA, it IS a taxable event...........

Thanks all (love the quick responses!)

It is a traditional IRA and would transfer to another non-Roth IRA- all within Vanguard.

 

[RockyMtn]

if the existing ira has a mm option you can just sell the shares and place into mm fund. Not a taxable event. If you have to shift to an entirely different ira to get a mm option you need to do the 'trustee to trustee' transfer. Don't have a check made out to you, have it made out to the new ira trustee.

 

[RockyMtn]

Thanks all (love the quick responses!)

It is a traditional IRA and would transfer to another non-Roth IRA- all within Vanguard.

if this is the case you should be able to find a money market option within the Vanguard funds. You won't even need to open a "new" ira.

 

[Alan]

if this is the case you should be able to find a money market option within the Vanguard funds. You won't even need to open a "new" ira.

+1


I've done this before and it is simple and easy to, with no taxable event.

 

[pb4uski]

+2 when you log onto your VG IRA account you can exchange mutual fund shares for money market fund shares so after the transactions process you would have some mutual fund shares and some money market fund shares in one VG IRA account.

 

[scrabbler1]

I am not a Vanguard client but I would posted the same stuff as RockyMtn, Alan, and pb4uski. A friend of mine (also not a VG client) wanted to open a new fund within his TIRA last year and transfer funds in that IRA's cash/MM account into it, pretty much the reverse of what you (bizlady) wants to do. It was as simple as a few point-and-clicks and it was all done. It was not a taxable event.