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Conference nyoss1::market_investing

Title:	Market Investing

Moderator:	2155::michaud

Created:	Thu Jan 23 1992
Last Modified:	Thu Jun 05 1997
Last Successful Update:	Fri Jun 06 1997
Number of topics:	1060
Total number of notes:	10477

743.0. "IRA Fee's" by SNAX::WAGER (Assumption-the mother of all screw-ups) Thu Jul 14 1994 05:08

     I have a question on IRA's. I realize they are no longer tax 
deductible if you make over a certain income but the gains/interest are 
tax deferred. One thing I was wondering about is what fee's are 
normally associated with IRA's for people just starting one. I have 
read where SCHWAB and others will waive fee if you have let's say over 
10,000 dollar balance but what about for us folks who are just 
starting with the 1st $2000 is there anyone that will not charge us 
$25 a year maintenance fee for the privilege of holding on to our money.

     This may be a naive question and I have not looking into it but 
after reading 742.1 I realize I may have to save more than the 8% SAVE 
allows us, and I know maintenance charges may be levied I just don't know 
what it standard practice and I would like to avoid fee's if at all 
possible.

Vern

T.R	Title	User	Personal Name	Date	Lines
743.1	The standard practice is there is no standard practice	ZENDIA::FLEMMING		`Thu Jul 14 1994 08:23`	8
	Read their prospectus and business terms which are required to spell out the fees. It varies all over the map and also depends on what they are trying to sell at the moment and what part of the demography they are after. Do try to get answers that are definitive, i.e., no fee ever if a minimum balance is held forever, etc. Not, no fee the fisrt year or the next year if you get 6" taller. You can find almost anything you look for to get your initial business. Just make sure it doesn't cost an arm and a leg to continue to do business with the firm.
743.2	Scudder has no fees	ASDG::FERRARI		`Thu Jul 14 1994 08:46`	5
	I know that Scudder allows you to open a no-fee IRA, the minimum amount is $500 per fund. Scudder is a mutual fund company which offers no-load funds. I have dealt with other companies in the past that charged up to $35 per account per year.
743.3		BOBSBX::QUINLAN	Mark Quinlan, Alpha Personal Systems	`Thu Jul 14 1994 12:01`	14
	I believe Fidelity Investments charges $10/fund per year for each fund in your IRA account with a $30 maximum. You may want to check into Waterhouse Securities, too. In their attempt to compete with Charles Schwab they may have a lower limit on their no-fee IRA. In my experience most fund companies charge $10-12 per fund/per year for IRA accounts. Another fee to check into is the account "transfer fee" or closing fee which is what you would pay to tranfer your account from say Fidelity to Schwab. Most legit IRA managers do not charge such a fee, but I have heard this fee can go up to $50. Mark
743.4	pay only once	ASDG::MISTRY		`Thu Jul 14 1994 14:49`	12
	Fidelity waives the IRA fee for accounts with more than $5000. The fee is assesed based on the acount balance in October of a given year. Thus, if you started the account in november with a $2000 1994 contribution, and then make a 1995 contrbution of $2000 and make a 1996 contribution of $2000 before october of 1996, you would pay the fee only once (in 1995). All of this assumes that all the money is in a single fund. Kaizad
743.5		SUBPAC::MISTRY		`Mon Dec 12 1994 10:27`	10
	When a fund charges you an IRA maintainence fee of $10, and withdraws it from your fund, does this have any tax implications? Is it treated in any way as a withdrawal from the fund? My wife forgot to pay up her $10 and had the fee deducted from her IRA fund. Kaizad
743.6	Is it a tax loophole?	AWECIM::VERMA	Virendra, HLO2-1/A7, DTN 225-6518	`Mon Dec 12 1994 10:45`	5
	I don't think this is treated as withdrawal from the fund as long as it is being used to maintain IRA fund. This money is tax deductible by law. Using IRA fund to maintian it is a smart way to get rid of 2% barrier. I have not seen any ruling that the fund should be managed by after-tax money. Seems to me a tax-loophole.
743.7	Pay the Fee Directly	I18N::GLANTZ		`Thu Dec 15 1994 17:54`	5
	It doesn't seem smart to me to use tax-sheltered IRA funds to pay the annual maintenance fees. You slowly dribble out the corpus that way. Better to pay the maintenance fee out of your own pocket, and let the $10 build up through the power of compounding.
743.8	and it might even be deductible	PCBUOA::GIUNTA		`Fri Dec 16 1994 08:44`	3
	And if you do pay the IRA fee out-of-pocket instead of having it deducted from your IRA account, you can deduct the fee on Schedule A under investment expenses as long as you meet the 2% floor requirement.
743.9		ALLVAX::STAATS	parts is parts	`Mon Apr 03 1995 17:18`	12
	This is sort of related to fees on IRAs... Have the tax laws changed regarding early surrendering of an IRA? Specifically I was wondering if the 10% penalty has been increased to 20%? (in addition of claiming the money as income and taxes on that income). I assume the owner of the IRA is responsible for paying the taxes and penalty, not the institution the IRA was invested through? Or does the company withhold the penalty and the taxes? Thanks in advance. todd///
743.10	A Letter Stops Withholding	I18N::GLANTZ		`Mon Apr 03 1995 18:02`	9
	If you request a premature distribution of an IRA, the financial institution will withhold government penalties and taxes unless you accompany your request with another request to not take such action. If you neglect to request not to withhold, especially nice financial institutions will hold your check and remind you to send in a do-not- withhold letter. Check with your financial institution for the exact wording.