Fund not allowing a TIRA to RIRA rollover
My MFS mutual fund family will not let me do a TIRA to RIRA rollover without the name of my adviser to assist me. I HAVE HAD THIS TIRA SINCE 1992 AND SINCE 1993 WITHOUT AN ADVISER BECAUSE HE LEFT. the MFS fund has been asking me for an adviser but I don’t have one. Do I have to get an adviser to convert my TIRA to a RIRA like they say or can I REALLY convert it myself. Would I have to use an adviser to cash out the TIRA so I can use it to open a RIRA in another fund family?
Permalink Submitted by Alan Spross on Mon, 2008-10-06 04:40
Perhaps the reason for this is to reduce the number of expensive recharacterizations that take place if you change your mind or do not qualify under the Roth income limits.
However, they certainly cannot deny you a total distribution if you want to roll it over to a Roth IRA with the custodian of your choice. In addition, a Roth conversion does not count as a rollover with respect to the one rollover limit per 12 month period.
That said, if you convert too much in one year, you will have quite a tax bill, and any recharacterization you do will have to be done by direct transfer to a TIRA account.
If you elect to convert part of the distribution, then the part you roll over to a TIRA (ie do NOT convert) will count as your one permitted rollover, so you would have to be sure you did not do a prior rollover with the MFS fund in the preceding 12 months. You would also have to be sure to specify that you do NOT want any tax withholding. There is a 10% default withholding if you do not specify anything.
Permalink Submitted by charles lore on Thu, 2008-10-09 01:14
I’m just wondering about Alan’s comment in last paragraph. I would say you should do any move to another TIRA as a direct rollover( trustee to trustte transfer) thereby bypass 12 month rule.. You can do as many as you’d like.
Permalink Submitted by Alan Spross on Thu, 2008-10-09 01:28
I agree, except that the poster is having trouble getting MFS to do a conversion without an advisor. The recommendation was just a work around to enable him to do his own Roth conversion by rollover. In addition, the 12 month rules does not even apply to Roth conversions, even though they are rollovers. Ref. Pub 590, p 64.