Moving Your Roth IRA to another Roth IRA

Tuesday, April 02, 2013

By Joe Cicchinelli, IRA Technical Expert

Follow Me on Twitter: @JoeCiccEdSlott

If you have a Roth IRA, you may want to move that money to another Roth IRA elsewhere. There are lots of reasons you might want to do so. For example, maybe the current financial organization that has your Roth IRA has high account fees, and you would like to find another custodian with little or no fees. Or maybe you’ve found a new financial advisor who works with a different custodian than your current one. Whatever the reason, you can move your Roth IRA funds to another custodian at any time. But, there are certain rules that must be followed.

There are two ways to move Roth IRA money to another Roth IRA:
1. 60-day rollover
2. Direct transfer

If you choose the 60-day rollover option to move your Roth IRA money, you first must ask for a distribution payable to you from your current Roth IRA custodian. After you receive the distribution, you have 60 days from the date you receive the funds to redeposit (rollover) them to another Roth IRA. If you miss the 60-day deadline, the funds aren’t rollover eligible and you will lose the benefit of future tax-free compounding of earnings on that money inside a Roth IRA. Also, you a
re limited to one-rollover-per 12 months from each Roth IRA you have.

If you choose the direct transfer option, you ask your current Roth IRA custodian to transfer the funds directly to your Roth IRA at another custodian. In a direct transfer, you don’t have use or control of the money; it’s sent right to your Roth IRA elsewhere. The direct transfer option has the advantage of not being subject to a 60-day limit or a one-rollover-per-year restriction. As a result, the direct transfer option is less problematic than the 60-day rollover option.

If you have assets in your Roth IRA such as securities, those assets can also be moved to another Roth IRA. If you choose the 60-day rollover route, the same assets that are distributed to you must be rolled over.
 

2014 Retirement Guide Helps You Save and Stretch Wealth

– By Joe Cicchinelli and Jared Trexler

Receive Ed Slott and Company Articles Straight to Your Inbox!
Enter your email address:

Delivered by FeedBurner

 

Posted in: , ,

Content Citation Guidelines

Below is the required verbiage that must be added to any re-branded piece from Ed Slott and Company, LLC or IRA Help, LLC. The verbiage must be used any time you take text from a piece and put it onto your own letterhead, within your newsletter, on your website, etc. Verbiage varies based on where you’re taking the content from.

Please be advised that prior to distributing re-branded content, you must send a proof to [email protected] for approval.

For white papers/other outflow pieces:

Copyright © [year of publication], [Ed Slott and Company, LLC or IRA Help, LLC – depending on what it says on the original piece] Reprinted with permission [Ed Slott and Company, LLC or IRA Help, LLC – depending on what it says on the original piece] takes no responsibility for the current accuracy of this information.

For charts:

Copyright © [year of publication], Ed Slott and Company, LLC Reprinted with permission Ed Slott and Company, LLC takes no responsibility for the current accuracy of this information.

For Slott Report articles:

Copyright © [year of article], Ed Slott and Company, LLC Reprinted from The Slott Report, [insert date of article], with permission. [Insert article URL] Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article.

Please contact Matt Smith at [email protected] or (516) 536-8282 with any questions.