Ask Terry Questions Tradional IRA rollovers and taxes

Tradional IRA rollovers and taxes

By Terry Savage on February 07, 2014 | Financial Planning / Retirement

I rolled over a matured traditional IRA CD this past Oct., 2013 to a liquid cash IRA acct.
I plan to merge another small IRA next month to then have all IRA’s combined into one.
I will then plan to find a CD that pays a little more interest.
The IRA in the liquid acct. has accumulated $ interest.
I have not touched this IRA money nor plan to except for future RMD.
Do I need to report this earned interest on my 2013 income tax,
because it is in a liquid acct., as I never had to when it was in a CD ?
I’m confused.

Terry Says:  ANY investment inside your traditional IRA grows tax-deferred, until you take a withdrawal — either because you need the money or because you’ve reached age 70-1/2 when required minimum withdrawals must be taken.  Just be sure that you do a proper custodian-to-custodian rollover when you handle these transactions.  And don’t lock your money up for too long in one CD.  There are provisions for penalty-free withdrawals in order to meet required minimum distributions, but that can sometimes be complicated in dealing with your custodian.



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