How to Transfer IRA Accounts

By Shani Valdez

  • Overview

    Transferring IRA accounts is relatively simple. Transfers can take place one of two ways: the delivering IRA custodian can send a check of liquidated assets (made payable to the new IRA custodian) to the account owner, of which he or she then deposits to the receiving custodian. Or, a trustee-to trustee transfer (direct rollover) between the financial institutions can be done. Seamless trustee-to-trustee transfers do require some careful oversight before and during the transfer process.
    How to Transfer IRA Accounts
    • Step 1

      Open a retirement at the receiving firm if one hasn't been established. Both transfer methods require a receiving account for transferring IRA assets. Trustee-to-trustee transfers can only be initiated amongst established accounts.
    • Step 2

      Check for assessed maintenance and administrative fees from the delivering custodian. Make sure these fees are covered. If you're doing a check transfer, the delivering firm should deduct any fees from the proceeds.

    • Step 3

      Know what securities are transferable. Talk with your IRA custodians to ascertain whether your IRA portfolio holds non-transferable securities before initiating the transfer.
    • Step 4

      Determine your course of action with non-transferable securities, if you have any. Liquidate the security and transfer the cash balance. Or, hold the security at your current custodian. Liquidating assets holds up the transfer process. Therefore, get this done before initiating the transfer.
    • Step 5

      Download the transfer form from the receiving brokerage firm's website. Some firms have separate transfer forms for both retirement and non retirement accounts. Be sure to have the right one.
    • Step 6

      Fill the form out carefully. Double check account numbers, cash balances, security symbols and number of shares being transferred. Mistakes add costly time to your transfer.
    • Step 7

      Find out the transfer method being used. Brokerage firms typically do Automated Customer Account Transfer Services (ACATS) electronic transfers. However, some financial institutions do manual transfers only. ACATS take up to six business days once entered by the receiving firm; manual transfers can take between six to eight weeks.
    • Step 8

      Don't trade in your retirement account during a transfer! You could mess up the transfer process. Your custodian may place an account freeze once the transfer is initiated.
    • Step 9

      Communicate with both custodians throughout the transfer. Check that the transfer was initiated and accepted by the delivering firm. Dividends and capital gains deposited into your old IRA account after the transfer will be transferred by your former custodian to your new account for the first six months.
    • Skill: Easy
    • Ingredients:
    • Transfer form
    • New retirement account form if there is no retirement account established at receiving firm
    • Tip: Full transfers with no liquidations; maintenance/administrative fee issues or incorrect form information should take 6 business days the most. Transfers requiring liquidation, or partial transfers (are at the discretion of the custodian for partial transfer ACATS, but you can request an ACATS), may require a manual transfer.
    • Warning:
    • It is important if electing to have a check sent for the transfer, that it be made payable to the new custodian; otherwise, a check made payable to you will be considered a 60-day rollover (or distribution if the money is not deposited in a retirement account within 60 days), subject to a 20 percent tax withholding from the IRS and reported to the IRS on Form 1099R.

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