My IRA liquidated and stopped being an IRA

[pmer]

I'm not sure what it means or how to properly explain what happened.

It's a low risk style IRA and I get a call from my investor saying that the fund has stopped and or quit being an investment vehicle. It was liquidated and the funds are being held as is and waiting to be moved to another IRA.

Something about the funds management changed abruptly and now everyone that has shares has about 30 days to make changes or face getting a check and creating a taxable event. It was going mediocre and was gaining for several months then this gets dropped hard and fast on my investor. He has a ton in this fund and got a call from east cost yesterday and is kinda hot about how certain people were treated.

This must be kind of odd? Or is this just some of the back room activities that go on more frequently than than I understand.

[cabezaverde]

Be quick about getting that money into another IRA. If you don't, you will be subject to taxes and depending on your age, possibly a penalty.

[Finster101]

Be thankful you got the investment funds back. It is a simple matter to roll it into a new IRA fund but it must be done quickly to avoid any tax penalties.

[MrWolf]

DO NOT HAVE A CHECK WRITTEN TO YOU! The IRS will consider that a withdrawal even if you turn around and deposit it into another retirement vehicle. They will not recognize it as a rollover. I would get the funds out ASAP as something sounds wrong even if you got to your local bank and set up a rollover to one of their retirement funds just to buy you some time to find a different one. (I am not offering financial advice just common sense- I am retired). Good luck.
Ron

[dverna]

DO NOT HAVE A CHECK WRITTEN TO YOU! The IRS will consider that a withdrawal even if you turn around and deposit it into another retirement vehicle. They will not recognize it as a rollover. I would get the funds out ASAP as something sounds wrong even if you got to your local bank and set up a rollover to one of their retirement funds just to buy you some time to find a different one. (I am not offering financial advice just common sense- I am retired). Good luck.
Ron

Very sound advice

[cabezaverde]

DO NOT HAVE A CHECK WRITTEN TO YOU! The IRS will consider that a withdrawal even if you turn around and deposit it into another retirement vehicle. They will not recognize it as a rollover. I would get the funds out ASAP as something sounds wrong even if you got to your local bank and set up a rollover to one of their retirement funds just to buy you some time to find a different one. (I am not offering financial advice just common sense- I am retired). Good luck.
Ron

Good catch.

[Winger Ed.]

Don't put this off.
Be quick getting it rolled over and put into another account without the funds 'coming up for air'.

I'm in the middle of some of this sort of thing myself.
And the hassle will suck your will to live.
The govt. is worse than broke and is looking for any chance they can find to tax and grab your money.

[Tatume]

DO NOT HAVE A CHECK WRITTEN TO YOU! The IRS will consider that a withdrawal even if you turn around and deposit it into another retirement vehicle. They will not recognize it as a rollover. I would get the funds out ASAP as something sounds wrong even if you got to your local bank and set up a rollover to one of their retirement funds just to buy you some time to find a different one. (I am not offering financial advice just common sense- I am retired). Good luck.
Ron

I'm not an expert on these matters, but this statement is not necessarily true. After I retired one of my IRA accounts did exactly this, wrote a check to me. They mailed it to my home, I endorsed it, and my investment guy put it into another IRA. My investment firm negotiated with the old IRA prior to the check being written, explained what we wanted to do, and this is how it was handled. So, a blanket statement "DO NOT HAVE A CHECK WRITTEN TO YOU! The IRS will consider that a withdrawal even if you turn around and deposit it into another retirement vehicle." is not necessarily good advice. Better advice may be available from your investment broker. Talk to him.

[Winger Ed.]

After I retired one of my IRA accounts did exactly this, wrote a check to me. They mailed it to my home, I endorsed it, and my investment guy put it into another IRA.

True.
We're moving various accounts around to sort of bring everything under one umbrella so our heirs won't get tangled up
in the estate when they inherit it. We'd had various retirement accounts sort of scattered around a few institutions.

The financial industry is regulated up one side of the street & back down the other.
EVERYTHING they except take bathroom breaks has to be in according to some law or another.

Some are making the transfers to the one place electronically, some are more 'involved'.
I also got in a check from one of them and it was the only way they could handle that account.
It is-- and had to be addressed to the new institution for direct deposit in our account to comply
with the tax laws to avoid it becoming 'taxable income' in the eyes of the IRS.

Dealing with the new institution couldn't be better. Their customer service and assigned reps. are the best I've seen.
Our guy would walk me through some on line stuff, and start quoting the law they had to obey,, blah, blah,,
I'd cut him off and tell him I was hung over and slept through that class in accounting college.

He'd say, OK, just type this in, and click that button....
It's going as painless as possible...

[Handloader109]

I'm not an expert on these matters, but this statement is not necessarily true. After I retired one of my IRA accounts did exactly this, wrote a check to me. They mailed it to my home, I endorsed it, and my investment guy put it into another IRA. My investment firm negotiated with the old IRA prior to the check being written, explained what we wanted to do, and this is how it was handled. So, a blanket statement "DO NOT HAVE A CHECK WRITTEN TO YOU! The IRS will consider that a withdrawal even if you turn around and deposit it into another retirement vehicle." is not necessarily good advice. Better advice may be available from your investment broker. Talk to him.

You were REAL LUCKY for it not to have been considered a taxable event. In every occasion I've ever heard of, if money is in a standard IRA or 401K and you receive a check, it IS in your hands and is a taxable event. Perhaps it was a Roth IRA... those aren't taxable. But to the OP, yep, have the broker move into another IRA. Easy.

Sent from my SM-S908U using Tapatalk

[Alex_4x4]

Law and justice have little in common, and tax legislation, moreover, is not very friendly with common sense.

In general, since there are many older forum participants here, do not overload yourself with worries and protect your body from cardiovascular problems. Life is more valuable than money.

[Delkal]

You can get a check for an indirect rollover and have it not taxed but it is an unneeded headache since you will need to file additional tax forms and they probably will withhold taxes on the amount they give you. You will get the withheld taxes back but by then you will probably need a tax professional to figure out how to fill out the forms. And you only have a month or two to deposit the check or it is taxed as income.

If it is a direct rollover between companies you just have to fill out a couple of lines on a standard tax return. If the OP has another IRA he can call that company to have it combined or just call up a large brokerage like Vanguard or Fidelity and tell them you want to roll over an IRA. They will do all the work and will be jumping up and down to help you.

Without knowing how solvent to old 401K is I would do this ASAP. Like making some calls tonight or first thing tomorrow.

[Tatume]

You were REAL LUCKY for it not to have been considered a taxable event. In every occasion I've ever heard of, if money is in a standard IRA or 401K and you receive a check, it IS in your I talked to my broker and his office negotiated the transfer. hands and is a taxable event. Perhaps it was a Roth IRA... those aren't taxable. But to the OP, yep, have the broker move into another IRA. Easy.

I was not lucky. I did what I advised others to do, I talked to my broker and his firm negotiated the transfer. My recommendation is to seek professional help.

[MrWolf]

I'm not an expert on these matters, but this statement is not necessarily true. After I retired one of my IRA accounts did exactly this, wrote a check to me. They mailed it to my home, I endorsed it, and my investment guy put it into another IRA. My investment firm negotiated with the old IRA prior to the check being written, explained what we wanted to do, and this is how it was handled. So, a blanket statement "DO NOT HAVE A CHECK WRITTEN TO YOU! The IRS will consider that a withdrawal even if you turn around and deposit it into another retirement vehicle." is not necessarily good advice. Better advice may be available from your investment broker. Talk to him.

Retired CPA with over 30 years experience. I stand by my common sense advice. Why take a chance and end up paying penalties, etc.?

[racepres]

True.
We're moving various accounts around to sort of bring everything under one umbrella so our heirs won't get tangled up
in the estate when they inherit it. We'd had various retirement accounts sort of scattered around a few institutions.

The Reason for a Trust!!!

[Winger Ed.]

The Reason for a Trust!!!

That's what we've done. It's worth the trouble just to keep our estate out of probate court if nothing else.
But setting up accounts, or bringing them into the trust is slightly more involved than otherwise.
No big deal, a trust account just has to be set up a little differently by the financial institution.

[reddog81]

I was not lucky. I did what I advised others to do, I talked to my broker and his firm negotiated the transfer. My recommendation is to seek professional help.

If you were over 59.5 years old it was OK to withdraw. If OP is under 59.5 completely different rules apply.

[Omega]

I've rolled over a couple accounts into one I keep at t.rowe price, highly recommend them and their targeted funds. Mine is 2030, which was the year I thought I would retire at. It did well for me through the 2009 downturn and currently doing pretty good. Give them a call and they will help you get what you need to get it rolled over.

[garandsrus]

The problem with getting a check is that the company will withhold some percentage of the money for taxes, generally 20%. You can still roll over the full amount, you just need to come up with the 20% they withheld and include it in the rollover. You will then get a tax refund of the 20% that was withheld when you file.

[justindad]

If you cannot quickly choose another investment, you can leave it as an IRA in a money market account… which is basically a savings account with zero interest.
*
I don’t know which broker you hold this IRA with; Fidelity, Vanguard, etc. Whoever it is, it seems like they are not acting in your best interest here. The default in this situation should be to move the funds to a money market account, still within your IRA. So, change your broker. I suggest Vanguard.