HELP HELP HELP

[Guest Lisa Russell]

Newby to the IRA arena, Please help. I opened an IRA with my bank 2 years ago. Last year I converted it to a ROTH IRA which would be better for me. My questions is this, I noticed that IRA is invested in DTGBX - Dreyfus Prem Tech Groth Class B funds and that there is a back load on them when sold plus other fees. Can I open another IRA that has no loads? Can this be transfered into it? Was opening it at the bank and not an internet location a bad thing?

[John G]

Yes you can open an IRA at a different location or at the bank with a different investment. You can have lots of IRAs but your income defines your eligibility and maximum contribution. There are lots of valid investment options that have low or zero extra fees. You may want to consider NO LOAD mutual funds with expense levels below 1%... including various index funds. Generally lower expense/fee investments do very well, but there are also higher cost options that beat the average.

Should you move the old IRA? Hard to say. If that fund is performing similiar to others (and very few funds are performing well in the past few months) then why not keep it until you no longer have a back end load. You may find they also charge a fee to close out your account.

Clearly, you need to pay more attention to your decisions so you are not surprised. Ask lots of questions on fees and read all the materials.

[Guest Lisa Russell]

Thanks for the help. Your message mentioned that I should keep the current IRA until there is no back load? Is the back load a temporary thing?

[John G]

Ah, perhaps an assumption on my part! Mutual funds can have front or backloads (and rarely both) at varying levels. A common backload set up is to start at say 6% initially and decrease the load 1% each year until in year seven there is no load. However, you can also find funds with perpetual back end loads.

You need to read your prospectus or call the custodian to find out what you have.

[Guest Lisa Russell]

Thanks for all your help.