- if the money in your SMA comes from pre-tax contributions, you must roll it over to a Traditional IRA;
- if it comes from after-tax contributions, you must roll it over to a Roth IRA.
The other possible combinations are either detrimental to you, or - at 40 years of age - attract tax penalties.
Question 2: it depends on your personal circumstances, and you should see a financial planner.
Again: if your SMA funds come from pre-tax contributions, your choices are likely to be limited.
Question 3: generally you *should* be able to use the funds to start the IRA account, but make absolutely sure that you confirm that with the bank or financial institution concerned.
Hello,
I have an SMA account from a union that I am not with anymore. I had the paperwork sent to me to roll this money over into an IRA. ($35,000). I'm a 40 year old married male. I have a few questions.
1. Would I be better off with an IRA, or a Roth IRA?
2. Should I be dividing this money up between other things?
3. Can I use these funds to start the IRA account, or would I need to have one already to avoid a penalty, and taxes?
Thank you.
