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You are here: Experts > Business > Finance > Personal Investment & Financial Planning Q`s > IRA
Expert: John D Smith, CFP - 10/22/2009
Question
Hi there.
I just turned 59 1/2 and I have an IRA worth about $8000. I noticed recently that it is earning no interest, and while I'd like the money to earn some interest, I'm not into risk. If I just take the distribution, I would have to pay about $3000 tax on it. And I could spend about $2000 of the distribution and take it as a professional deduction.
Other than that, Is there a way to roll it over into another fund w/o paying income tax on it? And if yes, what vehicle is out there that would yield a few points of interest without averse risk? I've heard of bond funds but I am totally unfamiliar with this. Any suggestions? TY.
Answer
Hi. Yes, you can roll the IRA into another IRA at a qualified financial institution. When doing so, as long as it is whats called a trustee-trustee transfer then no taxes are due. If you are adverse to risk, then bond funds may be the right fit. It is difficult for me to explain bonds fundsin detail in a forum such as this so I suggest you do the following; visit www.vanguard.com and enter the investors portion of the website. There is a planning and advice tab that discussed various investment approaches based on risk tolerance. This information should be useful. If after reviewing you have addtional questions, please let me know.
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