How to Transfer Retirement Funds to Another Fund

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Transferring your retirement savings from one fund to another is relatively easy to accomplish without incurring substantial fees or tax penalties. The two options for transferring a retirement account from one institution to another are rollover and a trustee-to-trustee transfer. Securities and Exchange Commission (SEC) and Internal Revenue Service (IRS) regulations mandate that the transfer process be free from fees and be prompt.

  • Determine whether you will request a rollover or a trustee-to-trustee transfer. If you choose a rollover transfer, the old account holder will write you a check for the full amount of the account. Any securities held in the account will have to be liquidated before a rollover. Once you receive the check, you will have 60 days to deposit the funds into a new retirement account before incurring serious tax penalties. Trustee-to-trustee transfers move the contents of one account directly into another one with no time penalties or requirements to liquidate securities.

  • Select the target bank or brokerage firm to which you would like to move your retirement account. You may also transfer your retirement fund to another account within the same company. You can transfer a 401k account into an Individual Retirement Account (IRA) or transfer one type of IRA to another without incurring any penalties for early withdrawal. Select a bank or brokerage firm that has a favorable reputation with the SEC.

  • Continue to make contributions to the new retirement account. If you transferred or rolled over a retirement of one type into another, it will be governed by the contribution rules for the new type. The IRS mandates that you conduct only one retirement account trustee-to-trustee or rollover transfer every year.

  • Transfer funds out of your retirement account into a conventional brokerage or bank account if you don't mind paying the tax penalties. If you haven't transferred a retirement account in 12 months, you can transfer money out of your retirement accounts without paying any penalties if you replace the money within 60 days.

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