Transferring Investments from TDIF to Index Funds


I have a question about transferring investments in my Retirement Account.

I have some money invested in Target Date Index Funds, under my Traditional and Roth IRA due to rollovers from my old jobs. I kept investing in my Roth IRA only for the TDIF, but after learning more about the pros and cons of them, I rather invest in Index Funds (e.g. FZROX). I have a few questions about this:

  1. Am I able to somehow transfer or sell my TDIF stocks to acquire or purchase index funds I’d like to invest in? And if so, what would be the consequence if I do?
  2. Is it smart to leave the funds there and just start a new investment in my Roth IRA going forward?

Thanks for any assistance with this.

Hi @Ez2cme!

Thank you for your questions! To answer your first question, yes you are able to sell your TDIFs and buy index funds if that is what you want to do. Assuming the money is in retirement accounts, there are no tax consequences of selling one fund and buying another. If the funds are not in retirement accounts, there will likely be tax consequences. You should double check to see if there are any commissions associated with the sell or the buy.

To your second question, it is up to you. PFC is a proponent of both low cost Index Funds and Target Date Index Funds. The decision between one vs the other is more of a personal decision, but both are good options!

I hope this is helpful. Let us know if there are any other questions!

1 Like

THANK YOU!!! I appreciate the info!