Retirement Cash Out...How BIG a Hit ???

Very little to do with financial, but be aware that setting up a sound studio in a bungalow in TOWN is fraught with potential problems, noise-level wise. One man's music is another's noise!

The bungalow is almost assuredly not set up to contain the SPL's usual encountered and the neighbors might be a little miffed. And even the police can become involved with ordinance violations. Noise does not respect property lines. To convert a town bungalow to a good neighbor will take a major $$$$$ renovation. Then add on the interior treatment required (more $$$$$) to cut reflections and get an adequate recording environment. Just to include some financial advise.

Been there, done that, got the t-shirt!

Chip

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The 'mid-cap' is what? Just a post-tax brokerage account? Right? Not an IRA of any kind. You are how old? And are in what tax bracket? The mid-cap account as you call it may have tax due upon sale or it may be a loss. Any idea what he cost was, and what it's worth now?

The Roth, was from deposits or a conversion? If deposits, you can take the deposits out with no penalty, if conversion, it needed to age 5 years or age 59-1/2 whichever comes second, I believe.

The exact details are needed to give you answers that make any sense. It can go either way, depending. Joe

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More than likely there is a 1% sales charge when you liquidate the IRA from PNC. This would be applied if you took an RMD, did a rollover, or cashed out. Each of these has different tax consequences and depending on age, possible penalties. Rollover to another IRA and the only fees paid would be the 1% on the PNC end.

The penalities mentioned would be for liquidating an IRA tax shelter before age 59.5 because the withdraw would not be qualified. How old are you? If you are close to age 59.5, you might be able to use rule

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It depends. Your broker was telling you about costs that the *brokerage* imposes. If you'd used no-load funds (you didn't tell us what funds are in that Roth IRA, btw - a Roth IRA is a kind of an account, not a specific investment inside such an account), your broker would not "hit" you for anything for cashing out. The other side of the story, though, is what you mean by "cashing out".

If you mean "cashing out" to be moving from that broker to another one, but keeping the account type intact (ie. moving your Roth IRA funds from Broker A to Broker B) you are fine - should be no additional costs.

But extracting funds from a Roth IRA (or any other IRA or 401k) may have other costs. If you're younger than retirement age, you may be hit with a 10% penalty on some or all of the distribution. If it's a tax-deferred account (ie. regular IRA or 401k rather than a Roth), you also owe income taxes on it.

If it's a regular taxable account and you have a fund which has increased in value substantially, you may have capital gains taxes to pay on it, too.

If you want to liquidate the account and spend the cash, it's a full distribution. From IRAs, usually subject to penalties (if you're too young, though with some exeptions like purchase of a first home), possibly subject to income taxes (see above), and finally, depending on what's in the account, possibly subject to broker's fees, too (that 1% in your example).

Again, you're mixing apples and oranges here. A Roth IRA is a kind of account. A Mid-Cap fund is a specific investment which may be in your Roth, or it may not. It's not clear to me what your situation really is, but it sounds like your wife is probably right.

"joetaxpayer" wrote

To avoid both a penalty and taxes, one can take the conversion amount (sans earnings) out after five years regardless of age, no?

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I think you are right, Elle, my mistake above.

Deposit - can be withdrawn anytime Conversion - needs to age five years

To remove gains without penalty, one must be 59-1/2, disabled or 72t(?).

That sound right?

Joe

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"joetaxpayer" wrote On withdrawing from one's Roth IRA without penalty nor taxes:

A person can also remove up to $10k from one's Roth IRA for a first-time home purchase up to $10k etc. per

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