How to Move a Roth IRA to Another
Roth Individual Retirement Accounts (IRA's) are retirement accounts that you can contribute to regardless of your employment situation, unlike 401k plans that require you to make contributions through your employer. Even though there is an annual contribution limit, there is no limit on the number of Roth IRAs you can have. At any time, you can move money from a Roth IRA to another Roth IRA to consolidate your retirement portfolio or to hopefully achieve higher returns.
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Instructions
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Determine how much money you want to transfer. You are allowed to transfer all or just a part of your Roth IRA to another Roth IRA.
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Decide whether you want to use a direct transfer or a rollover. With a direct transfer, the financial institution that has custody of your Roth IRA will send the money right to the other Roth IRA. If you choose a rollover, the money is paid to you--except for 20 percent withheld to pay for taxes you incur if you fail to redeposit the money--and you have 60 days to redeposit the money in another Roth IRA or the money will be considered by the IRS. For most people, the direct transfer is the best option.
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Determine the account information for the Roth IRA you want to move the money into by contacting the financial institution with custody over the new Roth IRA.
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Contact the financial institution that has custody of your current Roth IRA and inform the company of your decision to transfer the money. If you are doing a direct transfer, you will need to provide the account information for the Roth IRA you are transferring the money into. If you are doing a rollover, the money will be paid to you.
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Tips & Warnings
You are only able to do one rollover per 12 month period. However, you can complete as many direct transfers as you want.
