Can I Move My IRA To a Money Market Account?

Shawn Plummer

CEO, The Annuity Expert

Yes, to an IRA Money Market Account

You can move your Individual Retirement Account (IRA) to an IRA money market account. This is essentially a transfer within the IRA framework, where the funds are moved from one type of investment (like stocks or bonds) to a money market account still within an IRA.

No, to a Standard Money Market Account (Without a Taxable Event)

Transferring IRA funds to a standard money market account (not under an IRA) will trigger a taxable event. This is because it is considered a distribution, and you may also face penalties, especially if you’re under the age of 59½.

Example:

  1. IRA to IRA Money Market Account: You have an IRA with a bank or brokerage. You decide to move some or all of your funds into a money market account offered by the same or a different institution. As long as this money market account is categorized under an IRA, this transfer is not taxable.
  2. IRA to Standard Money Market Account: You have an IRA and decide to move funds to a regular, non-IRA money market account. This action is considered a withdrawal and will be subject to taxes and potential penalties.

Comparison of IRA Money Market and Standard Money Market Account

FeatureIRA Money Market AccountStandard Money Market Account
Tax ImplicationsNone (if within IRA framework)Taxable as income + penalties
PurposeRetirement savingsGeneral savings/investment
AccessibilityLimited (penalties for early withdrawal)High (easy access to funds)
Interest RatesVaries (often higher than savings accounts)Varies (often higher than savings accounts)

Conclusion

Transferring funds from an IRA to an IRA money market account is a safe and tax-free strategy for those seeking a low-risk investment within their retirement plan. However, moving IRA funds to a standard money market account outside the IRA structure will result in taxes and potential penalties. Always consult with a financial advisor to understand the implications of such a transfer fully.

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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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