Dave Says: Can You Change the Mutual Funds in Your Roth IRA?

Dear Dave,
I just retired from the military, my wife works full-time and we’re seeking better mutual funds. Can I transfer my poor-performing Roth IRA mutual to another institution without incurring a penalty? Also, which mutual funds do you recommend for Roth IRAs?

 
- Dan  

Dear Dan,
Yes, you can. It’s called an IRA rollover. By doing this, you can roll from Roth to Roth or from mutual fund to mutual fund without taxes or penalties.

I never recommend specific mutual funds. I go with good growth stock mutual funds that have been open for five years or longer. If you can find some with solid 10- to 20-year track records of success, that’s even better.

Spread one-fourth of your investment over each of these four categories – growth, growth and income, aggressive growth and international. Then sit on them. Mutual funds are not for short-term investing, so what I’m talking about here is crock-pot cooking, not a microwave approach.

The only way to beat the market is by staying in it for the long haul!

- Dave