Selling shares in a mutual fund so that you can fund a roth ira. Is this a good idea.?

If the mutual fund is currently held with a large fund family, you should be able to open an IRA with the fund family and have your mutual fund transfered to your new ROTH IRA. This way it grows tax-free! If it isn't, you could also open a ROTH IRA with a broker and then transfer the mutual fund into your new account. If you don't want to keep the mutual fund, then you can sell it and fund a new ROTH IRA. However, I would be sure to check and ensure that there is no penalty on the sale, and that you still have plenty of time before you will need the money so that the tax-free growth is worth doing. Good luck

Generally, Roth IRAs are funded with after tax dollars. So, as long as the shares are currently held in a nonqualified account, it should be no problem if: A)the Net Asset Value NAV is within the yearly contribution limits for Roths, B)The Roth custodian is able to hold the shares, IE: not all clearing houses are able to host every fund family. Last, I would hope that you are not selling out of a tax defered plan to fund the Roth since it is so widely known that allowing your money to grow tax defered is of greater benefit. Just as information, many employers are now making the Roth 401K available, so if you are maxing out on the regular 401k, you can channel additional money to the Roth type.

If the above conditions are met, then it is not a bad idea to make the trade so long as you still have other investments in nonqualified plans so that you can supplement your check if needed. Hope this helps, and keep investing!!!!!!!!!