american funds ira question?
December 14, 2009 by
Filed under american funds ira
i know that the max annual contribution is 5,000 per year to an ira or ira mutual fund. my question is can someone ’start’ an ira with any amount? if not, why does american funds, in particular, have a chart showing the sales charge that you would pay upfront when investing any amount from 5,000 to 1 million?
i rolled an old 401k into an ira mutual fund with american funds and it was over 10k but i know that is different as well since it was a rollover. how does this apply to the before mentioned scenario? thanks in advance.
i am not worried about the minimums. i know some you can open with $0. Please read the question again..
if i wanted to start an ira with 100,000 can i? or do i have to stay within yearly contribution limits? what would stop someone from opening a 100,000 ira each year to avoid the max yearly cont?? does that make more sense now?
so the max amount someone can start an ira with is 5,000? i work for a financial institution and i am pretty sure i have started iras with at least 10k
The minimum amount required to open an IRA account varies with the account custodian.
Some custodians may have loaded (sales charge) mutual funds where the loads are waived if it’s in an IRA. Read the fund prospectus for sales charge information.
There is no minimum contribution to implement an IRA… and I dont understand the rest of your questions to answer. There are what’s called “breakpoints” on mutual fund purchases… brakpoints are dollar amounts that get a “break” on sales charges… I think it is $25,000 minimum purchase in one year to qualify for sales charge breakpoints with American Funds.
You have to stay within yearly contribution limits when starting an IRA or adding to an existing one. The fund company reports to the IRS your contributions. If you put in $100,000, the IRS will know and come a calling with penalties.
The chart from American Funds showing more than the yearly limit must be also for rollover IRAs from 401k or other IRA from other companies.