Author Topic: Withdrawing and then re-depositing in IRA?  (Read 1081 times)

druth

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Withdrawing and then re-depositing in IRA?
« on: November 02, 2015, 08:00:46 AM »
Earlier this year I had the full 5500 in my roth IRA for this year.  I pulled this out to buy a house.  My understanding from looking online is that I can refill this money as long as it is all part of the same tax year.  Vanguard will not let me make further contributions though because they say I have already reached my max. 

Am I misunderstanding the rules or should I call Vanguard and ask them to lift my cap?

new mustache city

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Re: Withdrawing and then re-depositing in IRA?
« Reply #1 on: November 04, 2015, 11:52:31 AM »
I'm in a similar situation: I withdrew 4k from my IRA in April. I didn't end up needing it but held on to it until now, and I wanted to redeposit the same amount on top of the 5500 I put in last month. I sent Vanguard a message explaining this and they said:

Quote
An indirect rollover can be processed by withdrawing the money from your IRA account and redepositing the same amount back into the same IRA or a different IRA within 60 days. If you hold the money longer, it will be subject to taxes and penalties. Under revised IRS rules that went into place this year, you can make only one indirect rollover in a rolling 365 days, regardless of how many IRAs you own. You have passed the deadline to complete an indirect rollover.

I thought I could withdraw principal penalty-free at any time, since it's already been taxed...? I'm going to call them to see if there's anything else I can do, but thought this info would be relevant to you in the meantime.

druth

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Re: Withdrawing and then re-depositing in IRA?
« Reply #2 on: November 04, 2015, 12:04:44 PM »
That is very helpful.  It sounds like what I have read about this being allowable may have been out of date.  Let me know if you find anything else from calling them.


new mustache city

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Re: Withdrawing and then re-depositing in IRA?
« Reply #3 on: December 14, 2015, 02:40:56 PM »
After calling Vanguard and also asking a CFP, I have confirmed that it's not possible to redeposit the money once 60 days have passed.