Transferring an IRA from one financial institution to another can be a quick and easy process. In most cases, it can take as little as five days for the transfer to be completed. However, the exact time frame may vary depending on the custodian of your IRA account. You can track the progress of your transfer online with our transfer tracker.
If you receive a check from the former custodian of your IRA account, you can deposit the money directly into your Fidelity IRA account. According to the IRS, you have 60 days from the date you received the distribution of an IRA or retirement plan to transfer it to another plan or IRA. In certain situations, the IRS may waive the 60-day reinvestment requirement if you missed the deadline due to circumstances beyond your control. This one-year limit does not apply to traditional IRA transfers to Roth IRAs or Roth conversions.
If an entrepreneur, 57 years old, wants to transfer part of her IRA from one financial institution to another and use some of the IRA's assets to buy shares, this change will not affect her ability to transfer funds from one IRA trustee directly to another. This is because this type of transfer is not considered a reinvestment (Tax Resolution 78-406, 1978-2 C.). You are allowed to make tax-free transfers of your IRAs at any age. However, if you cannot renew your required minimum annual distribution (RMD), this would be considered an additional contribution.
The same rule applies for transferring funds from one IRA trustee directly to another. Most pre-retirement payments you receive from a retirement plan or IRA can be “reinvested” by depositing the payment into another retirement plan or IRA within 60 days. The limit will be applied by adding up all of a person's IRAs, including SEP and SIMPLE IRAs, as well as traditional and Roth IRAs, effectively treating them as a single IRA for the purposes of the limit. To make it easier to manage your retirement savings, consider transferring your IRAs from other institutions to an IRA.
If you're moving your IRA from one financial institution to another and don't need to use the funds, you should consider using the transfer method instead of reinvestment.