Additional Details
1 month ago
Thank you, great answers. I guess MVD34%26#039;s answer is definitive -- the IRS does not allow a Rollover IRA in a Hedge Fund. However, src answer seems to beg a clarification. In this case I am talking about rolling over a 401(k) account, and not an IRA within and IRA. Does this additional information make any difference in your answers?1 month ago
Thank you MVD34 for your thorough and revealing answers. I now got the message in a nutshell. Investing in hedge fund(s) is a tricky business that one would not lightly tread into. The prudent thing to do is to sit down with a financial adviser of a reputable IRA custodian and talk it over. Finally let me add my two cents before I step off my soap box. For some baby boomers (and myself an exception) it is not uncommon that their 401(k) plans may approach high six figures or even low seven figures after having been in the workplace for several decades. So rolling over to an IRA after 591/2 appears attractive. Also I believe the answer to the part (b) of my question is definitely (in italics) a no no, as 401(k) rollover to IRA%26#039;s are tax-deferred instruments by law for U.S. employer and employees only. The tax implication will perclude investing such deferred annuity in a foreign country. Many thanks again.
Best Answer
No...um...you do realize that the minimum investment for hedge funds are in the hundreds of thousands of dollars and that you have to have a net worth of at least $1million to invest in one...?
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**CLARIFICATION**
I think I misunderstood your question.
If you meet the minimums AND the custodian of your IRA allows investment in hedge funds, you can invest in that particular hedge fund -- or basket of hedge funds -- assuming the hedge fund, further, follows IRS rules and exemptions for IRA accounts.
You need to have a VERY large 401(k) to roll the IRA itself to a hedge fund -- if they even allow such.
Clear-er?
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Further --
Just did a quick such -- standard companies don%26#039;t seem to offer these %26quot;special IRA accounts.%26quot; Minimums seem to be $100k+. Fees are in the $500/year range. Some shade-y operators in the mix.
%26quot;no%26quot; might be the better answer after all.
Other Answers (2)
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No. Your rollover has to be within an IRA account. If you want %26quot;unconventional%26quot; investments for your IRA, the best best would be to set it up with a brokerage firm.
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