ROTH 1 YEAR RULE
What are the rules rereading moving ROTH money from 4 to 5 closed CDs to a brokerage sweep account, and then, when a decent interest rate becomes available, moving some of the money to a Fixed Index annuity, for example?
What are the rules rereading moving ROTH money from 4 to 5 closed CDs to a brokerage sweep account, and then, when a decent interest rate becomes available, moving some of the money to a Fixed Index annuity, for example?
Permalink Submitted by Alan Spross on Thu, 2012-07-19 20:22
If the Roths are to be maintained, any distribution must be rolled over to another Roth IRA within 60 days. There is one such indirect rollover allowed per Roth IRA account. Roth CDs are usually separate accounts for each CD, so each CD could be rolled over to a new Roth IRA.
If only “some of the money” is then moved to an annuity, it must be a Roth IRA annuity to be considered a rollover. Money from more than one CD could be rolled into the same annuity, but since the Roth IRA annuity is receiving rollover funds, one year must pass before a rollover can be made out of this annuity.
The money from the CDs that is not rolled over will be a distribution that must be reported. It may be tax free or if it contains Roth earnings the earnings would be taxable and subject to penalty if the Roth IRAs are not yet qualified.
Permalink Submitted by Denise Appleby on Fri, 2012-07-20 20:54
Move as transfer, and the 1-year rule would not be an issue.