How to Transfer IRA Assets

Transferring your IRA can be easy.

If your current IRA trustee is not performing as expected, it may be time to transfer your IRA assets. Paperwork and transfer options can be confusing and difficult to understand, especially if you wish to transfer some of the existing investments instead of transferring them as cash. To get your IRA transferred to a new home does not have to be a painful process, though. Follow five easy steps to help the transfer process go smoothly.

Instructions

1. 

   Find out about fees to transfer the IRA.

   Inquire about early exit fees and transfer charges before moving out of your old IRA. Also ask if there are additional charges to transfer IRA assets in kind. If the current account is going to be difficult to leave, you will want to know this before going through the trouble of filling out transfer paperwork. Ask your new IRA program about its transfer fees to get an understanding ahead of time.

2. 

   Online brokers may be better for frequent traders.

   Decide on a new trustee for your IRA. Depending on how often you track your funds and trade, different IRA plans are going to be better for you than others. If you prefer to trade often and make your own decisions, an online brokerage service may be appropriate. If financial concerns are confusing or you have substantial assets, finding a good financial advisory firm may be a better choice.

3. 

   Call and request IRA transfer paperwork.

   Request the paperwork from your new provider to transfer your old IRA plans. By filling out transfer documents, you'll ensure that dollars remain sheltered from taxes. You also will avoid taxes and unnecessary IRS penalties. If you would like the assets to transfer "in kind' rather than as cash, be sure and specify this with the new provider, because it may require additional signatures or documents.

4. 

   Carefully complete transfer forms.

   Read and carefully complete the paperwork. Question any fees that may be charged to ensure you understand all transaction costs. Paperwork will ask for the type of transfer. Make sure that your new IRA is the same type as the former IRA. Roth IRAs, traditional IRAs and rollover IRAs must be transferred to the same account type--or new paperwork and possibly more tax planning may be necessary. Often, firms will request a copy of a recent IRA statement, including the company logo, your account ownership type and account number, and any positions you'd like to transfer in kind.

5. 

   Transfers often take two weeks.

   Check the transfer status every few days. Paperwork mistakes can occur and sometimes there are additional account questions or forms for special situations. Expect the transfer to take a couple of weeks.

Tips & Warnings

• Make sure funds move directly from one trustee to another without you touching the money. If the funds come to you, you'll have a 60-day window to reinvest the money and avoid taxes and possibly early withdrawal penalties.

References

• IRS: Pub. 590: Individual Retirement Accounts
• Motley Fool: IRA Rollovers vs. Transfers
• CNNMoney: 401k Rollover vs. Transfer