It’s time, you’ve decided to open a self-directed IRA. You can almost picture the financial freedom and the retirement of your dreams. But to get started, you’ve got to make use of your old retirement account. How do you even begin? One of the most common ways to move your retirement account is known as a transfer. Not sure what that means for your retirement fund? Let us explain.
IRA Transfers: What Are They?
A transfer is where your retirement funds are moved directly from one custodian to another. You don’t see the money at all— it goes directly from your old plan to your new plan. This isn’t a taxable event and it isn’t reported to the IRS (unlike a rollover), so there’s no need to think about taxes. You can transfer your account as many times as you’d like, there is no limit on number of transfers per year. A rollover, by contrast, is reported to the IRS and limited to once every 12 months.
The one thing to keep in mind when transferring retirement plans: there are restrictions on which plans can transfer into what account-type. For example, Roth IRAs can only transfer into other Roth IRAs, so make sure you’ve opened the right type of account before transferring your funds. If you’d like more details on what types of plans can transfer into what types of accounts, or have any other questions, you can find more resources at IRA transfers & 401K rollovers.
At IRAR, we simplify retirement every step of the way. Have questions? Connect with our team today and get the clarity you need.
Step-By-Step: Transfer to a Self-Directed IRA
To transfer your account to IRAR, you’ll first need to open an account. You’d do this by completing and submitting an account online. Here's what we need:
- Open an account online
- Complete a Transfer Form
- Provide us a copy of your most recent account statement from your current custodian
There is a $30 fee to accept funds via wire, otherwise there are no charges for processing a transfer request. The paperwork is the same whether you are transferring cash, other assets, or both. Once we have all the required paperwork, we’ll send the request to your current custodian. Please check with them to inquire if they accept fax or email copies of transfer requests before submitting.
Once we receive your completed Transfer Form, we will submit it to your current custodian and notify you of the transaction status. Sometimes, there may be a hold up with your previous custodian, they will require that you communicate directly with them. If this is the case, it is your responsibility to follow up to assure everything is processing smoothly, we cannot do this for you. But don’t worry, we’ll keep you updated. If your custodian requires direct communication, we’ll let you know right away so you can follow up. You’ll also receive an email from us if we haven’t heard back from them and your transfer is taking longer than expected. No matter what, we’ll always keep you in the loop.
All-Cash Transfer Requests
If your account only holds cash, you’re done! Submit the completed forms with a recent statement to IRAR. Now all you’re waiting for is the funds to arrive.
If you hold assets in your current account and intend to transfer as cash, you will need to liquidate them before submitting your transfer request, otherwise your current custodian will reject the transfer and you will have to start the process again. This includes Brokerage IRAs, which will also need to be liquidated before transferring.
In-Kind Transfer Requests
If transferring assets in-kind from your previous custodian, your assets will need to be reregistered in the name of the new IRA, IRAR Trust FBO: client name IRA, client account number. For real estate and similar investments, this means the deed must be reregistered.
Some custodians require a Medallion Signature Guarantee when transferring your account. This is an authorized signature that guarantees securities. It’s used as an assurance from the transferring institution that the signature is genuine, to protect against forgery and fraud. Some providers have started asking for a medallion guarantee on transfers for assets that are not securities, and even cash, though this is not required and not technically how the medallion signature is intended to be used. IRAR doesn’t require these signatures, except on securities. A note to remember: A Notary Public is not the same as a Medallion Signature Guarantee and would not be an acceptable substitute.
After completing and submitting the paperwork, we wait for your current custodian to send the assets our way, where they will be deposited in your new IRAR account.
That’s it, once your funds arrive, you’re ready to invest!
Transferring your retirement account is the most common way to move your IRA to another IRA. It might sound like it’s going to be complicated, but it’s not, especially at IRAR. We keep the process simple.
The process has a few steps, but with our handy guide, you’ve got this. And if questions come up, our team is always here to help, just reach out anytime. Ready to take the next step? Start your transfer today and put your retirement into assets you can control.
Frequently Asked Questions
How long does an IRA transfer take?
At IRAR, most IRA transfers take 2–4 weeks to complete, depending on your current custodian’s processing times. Some custodians respond quickly, while others may require additional paperwork, which can extend the timeline. IRAR submits transfer requests promptly to minimize delays.
Does an IRA transfer incur taxes?
A trustee-to-trustee transfer between compatible IRAs generally is not taxable and does not create a reportable distribution. Moving pretax IRA funds into a Roth IRA is a Roth conversion and generally creates taxable income, even when the funds move directly between custodians.
How to transfer money from one IRA to another?
Open a compatible IRA at IRAR, complete the Transfer Form, and provide a recent statement from your current custodian. IRAR sends the transfer request to your current custodian. Once the funds are released, they are deposited directly into your IRAR account without being paid to you personally.
Are there fees for transferring an IRA?
IRAR does not charge a transaction fee for incoming transfers. If your transfer is sent via bank wire, there is a $30 fee. Some custodians may charge an outgoing transfer fee when you move funds away from them. Check with your current custodian.
Do I have to pay taxes on an IRA transfer?
A direct transfer between compatible IRAs generally does not trigger income taxes and does not count toward your annual IRA contribution limit. For example, this applies to a Traditional IRA transferred to another Traditional IRA or a Roth IRA transferred to another Roth IRA. A conversion of pretax funds to a Roth IRA generally creates taxable income.
How often can I transfer an IRA? Is there a limit to how many IRA transfers I can make per year?
There is no annual limit on trustee-to-trustee IRA transfers. The once-per-12-month rule generally applies to IRA-to-IRA 60-day rollovers, not direct custodian-to-custodian transfers. That rollover limit also does not apply to Roth conversions or rollovers between employer retirement plans and IRAs.
Do I need to liquidate assets before transferring an IRA?
It depends on the assets and the receiving custodian’s requirements. IRAR accepts cash and eligible alternative assets transferred in kind. If you request a cash transfer of money currently held in investments, those investments must first be liquidated. Confirm which assets IRAR can accept before submitting your transfer request.
Will transferring my IRA delay my investments?
Funds are not available for new investments at IRAR until your current custodian releases them and IRAR receives and processes them. IRAR keeps you updated on the transfer, but the timeline depends on your current custodian’s processing and any additional paperwork requirements.
What happens if my custodian rejects an IRA transfer?
IRAR will notify you. Rejections may occur when paperwork is incomplete or your current custodian has additional requirements. IRAR will work with you to address the issue and resubmit the request. Your current custodian may also require you to contact them directly.
Can I transfer part of my IRA instead of the whole account?
Yes. You can request a full or partial IRA transfer. Identify the amount or assets you want to transfer on the IRAR Transfer Form and confirm any requirements with your current custodian.
Do I lose interest or dividends during an IRA transfer?
Interest or dividends credited after the initial transfer may remain temporarily with your previous custodian and require a follow-up transfer. Confirm how your custodian handles these residual amounts. If investments are sold before transferring, you will no longer receive future dividends from those holdings, and cash earnings during the transfer depend on where the cash is held.
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