Conference nyoss1::market_investing

>	I assume I can have more than one IRA, right?  

	Yes, you can have as many as you want. However, most institution/bank
charge annual custotian fee $10 for each IRA account you maintain. Normally,
it will deduct from your account balance if you don't mail in that $10 check.
When you have lots of IRA account, the fee amount does add up.

>	I would prefer
>	spreading my risk even on the IRA envelope into two -- 
>	probably one fund family, and one a broker like
>	Schwab that promotes IRAs that they manage and let me
>	invest/transfer anywhere.  Is this ok/normal?

What Schwab offer you that other Mutual Fund family can't do ? Pls elaborate.
If you let them charge fee for transfer or invest into load fund, then take a
second thought. Normally, IRS allow you transfer once a year to different
IRA custodian.

>	Looking at my IRS brooklet and form, it looks as if these
>	IRAs won't even have to be mentioned in my tax form(s), providing
>	nothing goes in and nothing comes out.  Does this sound right?

Yes, you don't have to fill in tax form until you reach 59 1/2 when you ready
to retire.


Michael..

IRA maintenance fees tend to be higher than $10.  I pay $40 for mine.

    
    $40 is bit high for me. Vanguard, where my IRA sit, only charge $10/yr.
    
    Michael..

    RE: .2  Who is charging $40??? Most I ever paid was $15 to John Hancock
    (State Street Bank was custodian) and I bailed out of them because all
    round fees were too high.  Please forewarn us about the $40 collector.
    

Shearson Lehman tried to charge my wife $40 for her IRA. We've since left
them.

- George

    Janus has a program that charges an one-time-fee of $100 per SS number.
    If you paid this, all of your IRA account fees are waved for as many
    accounts as you like to open with them, as long as these accounts are
    all under the same SS #.
    
    Mike

My IRA (the one with a $40 annual fee) is with StockCross.  The custodian
used to be State Street Bank, but it was recently switched to a bank in
Denver.  I believe State Street also charged $40 or close to it.

>What Schwab offer you that other Mutual Fund family can't do ? Pls elaborate.

	A Schwab IRA would let me invest in a whole bunch of different
	mutual funds, individual bonds & stocks, etc.  I assumed that
	an IRA with a given mutual fund family would be limited to
	that family; is that wrong?

	Also, I just read that Schwab only charges $22/yr for an IRA,
	and after Sept 30, they are reducing that to $0 for investments
	of $10,000+.

     I am moving an IRA to T.Rowe Price.  They have a discount broker, so
     I can buy stocks if I want--don't know how this compares with
     Schwab, et al.  Since I plan to own more fund shares than stock
     shares for a while, this works for me.  Don't recall the fee for
     sure, but I think it is $10 (I'd remember a $40/yr fee).
     
                                       lance

Most Mutual Fund families charge an IRA Maintenance fee of approximately
$10/year per fund.  (You can play games such as moving all your IRA assets
from funds B and C into fund A on December 31 and then reallocate them on
January 2.  You may lose more in NAV differences than you save in IRA fees,
but at least you have that option within a fund family.)

If you want to buy individual stocks and bonds, however, you need what I have
heard referred to as a "self-directed IRA."  T. Rowe Price, Fidelity, Schwab,
and StockCross are just some of the companies that offer self-directed IRA's.

StockCross has the best transaction fees ($25 + 8 1/2 cents/share regardless
of share price or principal amount) but their annaul IRA maintenance fee was
too high for my tastes.  They also had fees for transferring any funds out
of the IRA account and also a big fee ($60?) for closing out the account.

The others had somewhat more reasonable IRA fees, but their transaction costs
were higher.  (Fidelity has a $48 minimum on brokerage transactions.)

My decision?  Use Mutual Funds for my IRA; buy individual stocks via StockCross
with non-IRA money.

Does Janus's $100 once-per-lifetime fee include self-directed IRA's?

    Olde Discount, a discount broker provides free IRA and their charges for 
    trades are reasonable. However, they do charge $50.00 for *closing* the
    IRA account (this would be applicable if you decide to move your money to 
    another custodian).

    BTW, they also provide good rate for money market for IRAs and they
    also offer Mutual funds. However, I don't know too much about their
    Mutual funds but I would certainly recommend them self directed IRAs.

    Abhijit

re: .12

Olde's mutual funds are all load funds.

Waterhouse is offering no-fee IRA accounts for this year.  They also 
have a no-load mutual fund "marketplace" like Schwab.

Marden

	I have a question about early dispersals of IRA funds--

	If I make an early withdrawal from an IRA, I know that I have to
	report it as income and some penalty is to be paid.  My question is,
	how much (%) is that penalty?  I got the form for withdrawal of the
	funds and the information on it says that there will be a penalty,
	but not how much.  I asked the question at the institution holding the
	IRA, but they did not know.

	Thanks for any help.			--Mike

    re: .14
    
    If I remember correctly, it's 10% penalty + any income tax you owe on
    the money you take out.

    Penalty is 10% of the amount of the early withdrawl, but there are a
    couple of ways to get around part of that cost.  If you have deductible
    medical expenses (ie costs > 7.5% of AGI), then you subtract the
    deductible medical from the "early withdrawl" amount, and only pay the
    10% penalty on the remainder.  Take a look at the form (5329, I think)
    and at the bottom it shows the other exceptions...there are a half
    dozen or more that might help.
    
    You pay regular income tax on the whole amount, even if you can beat
    part of the penalty.
    
    SteveSov

	Thank you both for the information.		--Mike

    
    Can I combine different IRA account into one?
    One account may be from deductible the other one from non-deductable.
    Does it cause any problem in the future?
    
    I like to buy EE bond as self directed IRA,  How do I do it?
    
    Thanks.
    
    Jason

>    Can I combine different IRA account into one?

    Yes.  There are notes in here or in the preceding conference that
    explain the rules for doing this.

>    One account may be from deductible the other one from non-deductable.
>    Does it cause any problem in the future?

    The funds that were taxed going in are not taxed coming out.  Those
    that were NOT taxed going in plus income and appreciation are taxed
    going out.  You must keep track of the amount that was taxed going in.
    When you withdraw you pay tax on a fraction computed by dividing the
    (total value less amount that was taxed going in) by the total value.
    You then adjust the remaining amount that was taxed going in.  The IRS
    has forms for all of this.
    
>    I like to buy EE bond as self directed IRA,  How do I do it?
    
    I assume you simply order the broker who has your self direct IRA to
    buy them.  Personally, I'd prefer a bond mutual fund, but there are
    advantages both ways.

    Why hold tax-deferred EE bonds in a tax-deferred IRA???
    
    (Not saying you shouldn't, just wondering why?)
    
    SteveSov

RE:.20 by SUFRNG::SUFRNG::SOVEREIGN_S

> Why hold tax-deferred EE bonds in a tax-deferred IRA???

EE bonds are a good way to hold short term cash right now.  They pay a higher
rate than money market funds or short term CD's,  can be cashed out at any 
time at par,  unlike longer term bonds or bond funds...

They might make sense as the cash part of an asset allocation plan,  or as an
ultra low risk short term investment,  but I'm not sure if you can buy EE 
bonds for an IRA.


Phil

>
> EE bonds are a good way to hold short term cash right now.  They pay a higher
> rate than money market funds or short term CD's,  can be cashed out at any 
> time at par,  unlike longer term bonds or bond funds...
>

    EE bonds are presently guaranteed at a minimum interest rate of 6% ONLY
    IF they're held for more than 5 years.  If they're cashed earlier the
    interest may be significantly less.  In fact, I believe the interest
    accrual calculation awards the 6% minimum retroactively when the bond
    reaches age 5.

    Also, I believe they cannot be redeemed at all is less than 6 months
    old.

    L.

	I have SERPed.  I took the lump sum distribution and had it
	deposited into my SAVE account.

	I recently withdrew some of that money and planned, among 
	other things, to purchase Texaco stock through Texaco as
	part of thier DRIP.  

	I was unable to determine how to define the DRIP as an IRA
	account.  I called Texaco and the lady said that they cannot
	do IRA's with thier DRIP, "it's not set up for that" she said.
	I don't understand that.  Might someone explain?

	Generally speaking.... how do I define, for the IRS, that the
	new IRA's will be from my 401K?  Is it simply a question of the
	correct amounts being withdrawn from one and deposited elsewhere?

	Thanks
    
    	bob
    

You cann't have a SPECIFIC DRIP be an IRA, but if you can locate a cutodian
which will allow registration of shares in an IRA account in your name, you
can access the DRIP of the company and register the IRAS shares for the plan.

And if you find someone who will act as custodian so you can have your DRIP's
in an IRA, please post it here.  I had tried to do that with my husband's IRA,
and the broker thought it could be done, but it turned out they weren't set up
for it either.  I've been sort of looking on and off for another broker who
would be custodian, but haven't put much effort into it yet, so I'd be 
interested in hearing if anyone else solves this problem.

Cathy

Charles Schwab has just started offering this (DRIP for stacks held in IRA accounts)
within the past few months.
I have set up DRIPs for several stocks (merck,gte,etc). I forget the exact amount but I
believe the commissions are in the neighborhood of 3.5% or $ 2.00, the lessor of.

    
    I have concluded that I will go the Schwab route.  It's easier 
    to manage.  I can do the Texaco DRIP thing, as well move around 
    in various stocks & mutual funds, all the while staying within 
    the IRA.
    
        

   After digging around in past notes, dated years ago, it was 
   mentioned that the only way to avoid paying the 10% penalty
   on the disbursement of your SAVE money, was to:

     1)  roll it over into an IRA or other employers pension fund
     2)  use it for medical emergencies

  But it was also mentioned that it could be used for an individuals 
  college tuition expenses. Given the theme of past notes I've read, I
  believe that this cannot be done.

  But, in this topic stream, it was mentioned that:

>>    Take a look at the form (5329, I think)
>>    and at the bottom it shows the other exceptions...there are a half
>>    dozen or more that might help.

  Does college expenses fall in this "half dozen"?

+Russ

There was some talk (in congress) about allowing penalty-free $
if they were used for college tuition.  As of the end of the 1991
tax year, that wasn't *real*, just *talk*.  It may have changed for
the current tax year, but I doubt it...that's the kind of thing that
politicians would love to take credit for, and I didn't notice any
of them claiming it during the recent election madness.

SteveSov

Hi,

Any opinions on how to keep funding an IRA when you are within a few years
of starting withdrawals?

A friend of mine is rolling a low-paying annuity into an IRA and is
considering the investment choices.  She already has Fidelity's Asset
Manager in her IRA and is wondering about what fund to roll the annuity
into.   Since she might be within 5 years of starting to withdraw from it,
she was wondering if a more conservative investment (like a bond fund)
might be more appropriate.

My thought was that any investments to her IRA should be taken in
consideration of her overall picture and when she plans on withdrawing her
money.  For example, if she is low on the bond side of her overall
portfolio (not just IRA) and is considering withdrawing money from the IRA
in 3-5 years, maybe she should roll her annuity into a bond fund in the
IRA.  If she has an adequate percentage of her total investment in bonds,
and she won't touch the IRA money for 3-5 years, perhaps something a little
more aggressive is approriate (like a balanced or asset allocation fund).

Her thought, on the other hand, is that she should look at the IRA  as a
"mini-portfolio", equally balanced between bonds and stocks - thus reducing
risk to her retirement savings.

1. Any opinions on how and with what a person nearing retirement age should
   continue to fund an IRA?

2. Should an IRA be funded as part of an overall portfolio strategy or in
   isolation?

3. What are the actual mechanics of making withdrawals?  Can you specify
   how much and from which fund in the IRA you want money?


Thanks!

Diana

    
    
    
    re:
    
    >2. Should an IRA be funded as part of an overall portfolio strategy or
    >in isolation?
    >
    
    
    Good questions (I have wondered these myself). I have considered my
    401K, IRA and other investments to ALL be part of an overall
    portfolio... Assuming that you realize that you will never be able 
    to take possesion of some of the funds (IRA and 401K except under
    specific circumstances). But here are other questions that arise from
    investing like this:
    
    1)If I consider them separate, should my IRA contain the higher 
    yielding funds (stocks) so that they will be protected from taxes,
    or should my IRA contain the "safer" funds (Short term bond funds 
    or CD's?) .
    
    2) (As an overall portfolio), should I consider my wife's and my 
       IRA's  as separate portfolios? IF we never split up and IF 
       we live to a ripe old age, it would not seem to matter... but 
       maybe someone has other opinions?
    
    
    Oh great gurus of financial wisdom, impart your opinions upon us!
    
    doug
    
    

    
    re: IRA safer or riskier?
    
        Riskier and less tax advantaged investments should go into the IRA.
        Just as you said in -.1, the IRA is part of your overall portfolio.
    

    Also consider that your IRA can continue for a long time--while you
    have to start withdrawal at a particular age (65?), you don't have
    to close it out the first year (there are rules about this I can't
    recall in detail--something about finding your predicted years of life
    and taking out an appropriate fraction).
    
    Consider that a healthy 65-year-old is likely to live a _long_ time
    and plan for income at 90: this means growth is still an issue.
    
    As said, the IRA is just part of the portfolio, and should have those
    things which produce the most taxable income/dividends, as it's
    "tax-advantaged".  Don't assume mingled assets with a spouse: it's
    likely you'll stay married and friends, but divorce after retirement
    isn't so rare as to be a surprise.
    
    		-John Bishop

    
    I have been considering contributing to an IRA for my wife and myself
    in addition to DEC's SAVE (401K) plan.  I was planning to put the
    maximum $2000 each, for a total of $4000, as we both work.
    
    Can I contribute to an IRA for my wife if she is not working at the end
    of this year?  In other words, my wife works now but she will be
    starting a maternity leave by the end of October and not returning to
    work until 1994.  
    
    Can I contribute $2000 to an IRA in her name, or do I have to go with 
    $250.00 max. in an IRA under my name, plus my $2000, for a total of
    $2250.00 only?
    
    Thanks,
    
    Pedro
    
    
                      
    

>    Can I contribute to an IRA for my wife if she is not working ...

      As  I  recall, this is pretty clearly spelled out somewhere in the
      1040 instructions.  The  reality  is  that  if  your  wife  has  a
      "regular"  IRA  it  can be funded each year with the LESSER of (1)
      $2000 or (2) her actual income  for  that  year.   If  she  has  a
      "sposal" (spelling?)  IRA it can be funded with not more than some
      fixed abount, probably the $250 which you  mentioned,  although  I
      can't confirm that figure.  And, no, you can't do both.

      I do not know if a "sposal" IRA must be formaly designated as such
      or if it is just a matter of how it is used in  a  particular  tax
      year.
      
      Oh, yes, if you have multiple IRAs, the limit applies to the total
      contributions to all IRAs.
      
      BTW a call to your IRA custodian can probably get you answers.

    
    Thanks for the quick response.
    
    In this particular case, neither my wife or myself have an IRA account
    at this time.  We are thinking of opening one for each of us.  Thus the
    question...  From your answer, I gather that what matters is the actual
    yearly income, not her working status at the end of the year.
         
    Thanks,
    
    Pedro

Your assumption is correct.  It is based on annual income.

Michael

    My wife and I are maxed out on our 401k and 403b retirement plans. We
    do not have and IRA account at this time. I'm trying to get as much
    money as I can into  tax deferred plans. I know that we are not able to
    deduct the $2000 per year into the IRA that I'm planning on opening but
    my question is Do I need to open the IRA account before the end of the 
    year? I'm pretty sure I have until the 15th of April but I'd like to
    make sure.
    
    	I will be looking to open the IRA with a company that has lots of
    Mutual fund options. Any input on what company's out there that you
    like would be appreciated also..

    >my question is Do I need to open the IRA account before the end of the 
    >year? I'm pretty sure I have until the 15th of April but I'd like to
    >make sure.
    
    Correct, April 15th.
    
    >	I will be looking to open the IRA with a company that has lots of
    >Mutual fund options. Any input on what company's out there that you
    >like would be appreciated also..

    Fidelity certainly has lots; waives the annual fee once the fund_value
    reaches $5k; waives sales charges on certain funds.
    
    TRowe Price also waives the fee at $5k, but their small-cap fund is
    closed to new investors.
    
    Vanguard has the lowest expenses, on average, of any fund family;
    threshold for fee waiver is much higher (~$10k-$50k).
    
    Scudder (at one time) waived annual fee for all IRAs; not sure if they
    still do.
    

    re: .38
    
    Also don't forget Charles Schwab. You can open an account with them and
    not limiting yourself to only one fund family. They will wave the
    charge once your account reaches $10K. 
    
    Mike

>   re: .38
>   
>   Also don't forget Charles Schwab.
Or Jack White, which offers even more mutual fund families than Schwab
and was rated by Smart Money magazine as the best of the lot.  I don't
use Jack White myself so I have no personal basis to recommend them.

    Does anyone know when you can start withdrawing funds from an IRA
    account (penalty-free)?  The standard answer I've seen is 59 1/2, but
    I've also heard that you can start withdrawing at *any* age, so long as
    you withdraw equal annual amounts through age 70 (or thereabouts). 
    Anyone know the details/validity of this?
    
    Here's the reason I'm asking:  I'm saving lots of money every year,
    with the goal of retiring at age 45 and living off the investment
    income.  If I can start withdrawing IRA money at age 45, then it makes
    sense to max out my IRA/401K contributions.  If I can't use the IRA
    money till age 59 1/2, then I'll have to put more money into
    non-retirement accounts so that I can start using it at age 45.
    
    Thoughts?
    
     

        re: .0

    >Does anyone know when you can start withdrawing funds from an IRA
    >account (penalty-free)?  The standard answer I've seen is 59 1/2,
    >but I've also heard that you can start withdrawing at *any* age, so
    >long as you withdraw equal annual amounts through age 70 (or thereabouts). 
    >Anyone know the details/validity of this?

    Get IRS Publication 590.

    The short answer is yes, you can start withdrawing at age 45. You can
    withdraw, penalty-free, ~4%* of your total IRAs value (all IRA accounts)
    in that first year. Once you start withdrawing, you must continue for
    five years, or until age 59.5, whichever is LATER.

    If you stop, you owe penalties.

    If you withdraw too much/too little, you owe penalties.

    You need ~$1.25 million to withdraw $50k at age 45, using the
    fictitious value of 4%.
    
    *Not the real value. See Pub 590.
     

    the ~4%* figure is gotten from actuarial computations which assume the
    590 informs you about.  Essentially the logic is saying you are
    starting your retirement withdrawals for lifetime (or 5 years :-)
    
    Of course this money is taxable if ira was non-tax but no 10% penalty.