If you're looking to move your individual retirement account (IRA) balance from one provider to another, the best way to do it is through a “trustee to trustee” transfer. This process moves money directly from one financial institution to another without generating taxes. To get started, open an IRA account at the new institution and contact both the original and new IRA providers to initiate the transfer. You'll need to submit the required documentation and, once approved, the old IRA institution will transfer the money to the new IRA institution.
To open an IRA at the new bank, provide your name, address, phone number, date of birth and Social Security number. Designate one or more beneficiaries, sign the documentation and send it to the new bank. An IRA transfer can be made directly to another account, or involve liquidating funds to deposit capital into a new account. The Internal Revenue Service (IRS) has established rules for IRA transfers, which are described below.
If you don't already have a Fidelity IRA, you'll need to open one in order to transfer money from your current IRA. Investing through these two IRAs involves different tax implications that can be an important consideration when making an IRA transfer. To make it easier to manage your retirement savings, consider transferring your IRAs from other institutions to an IRA. You must tell the IRA provider that you are going to transfer your IRA funds so that it does not withhold the funds for taxes and penalties.
Talk to the new IRA provider and let them know that you want to transfer your IRA. If you have a traditional IRA and have found a better provider for the same type of account, it's easier to make the transfer without generating a taxable event. If the former custodian of your IRA account sends you a check, you can deposit the money directly into your Fidelity IRA account. Since a Roth IRA is financed with after-tax money, you'll need to calculate the tax liability that is generated when transferring your IRA funds.
Alternatively, you can opt for an indirect reinvestment in which your bank or broker sends you a check that must be deposited with the new IRA institution within 60 days. An IRA transfer (or reinvestment) refers to transferring money from an individual retirement account (IRA) to a different account. Learn how to transfer an IRA from one institution to another through direct or indirect reinvestment, and understand the necessary steps.