Transferring an IRA From One Institution to Another

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on February 27, 2024

Are You Retirement Ready?

What Is an IRA?

An IRA, or individual retirement account, is a type of savings account that allows you to save for retirement.

You can contribute money to an IRA on a pre-tax or post-tax basis, and the money in your account can grow tax-free.

There are a number of different types of IRAs, including Roth and traditional IRAs.

Have questions about IRA transfers? Click here.

Hear It From Taylor

Taylor Kovar, CFP®

CEO & Founder

(936) 899 - 5629

[email protected]

I'm Taylor Kovar, a Certified Financial Planner (CFP), specializing in helping business owners with strategic financial planning.

When transferring an IRA, opt for a direct rollover to avoid mandatory tax withholding and potential penalties. Ensure the receiving institution offers investment options that align with your financial goals, such as low-cost index funds or specific asset classes you're targeting. Evaluate the fee structure—look for transparency and low annual fees. Timing is crucial; avoid market downturns during the transfer to preserve your investment value. Want personalized advice tailored to your financial situation? Let’s explore your options and strategize your IRA transfer for maximum benefit.

Contact me at (936) 899 - 5629 or [email protected] to discuss how we can achieve your financial objectives.


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Transferring My Existing IRA From One Institution to Another

If you have an IRA with a previous financial institution, you may be able to transfer it to your new institution.

This can be a great way to save on fees and get started with your retirement savings plan.

Transferring an IRA can help you avoid fees and get started with your retirement savings plan.

However, there are some other factors to consider before transferring your old IRA:

Review Fees

Putting your money in a savings or checking account is usually less expensive than investing it.

Compare the costs of transferring an IRA at your current institution to fees you'd incur by opening up a new IRA at another institution.

Review Investment Options

If you are considering moving your IRA from one financial institution to another, make sure to look into the investment options at the new institution.

You don't want to be stuck with the same investment options you had at your previous institution.

Understand Tax Implications

When transferring an IRA, you will trigger a taxable event.

This could mean that you'll owe taxes on the money that's transferred.

Make sure you are aware of the potential tax implications before transferring your IRA.

Check Out Your New Institution's Reviews

If you are considering transferring an IRA to another financial institution, check out the reviews for your new institution beforehand.

This will give you an idea of how reputable it is and if its fees are reasonable.

Types of IRA Transfer

There are two types of IRA transfer:

Rollover Transfer

This is when you move your IRA to another institution without triggering a taxable event.

For example, if your previous IRA provider goes out of business, you may need to rollover your old IRA into another institution.

Rollover transfer is a good option if you want to transfer IRA without incurring a taxable event.

Direct Transfer

With a direct transfer, your new institution will move the money in your IRA directly from your previous account to your new one without having to go back to you for permission or send it back when the transaction is complete.

To avoid triggering a taxable event, you may need to fill out the Internal Revenue Service form with your new institution.

Consult with a professional tax attorney before proceeding with either of these transfers.

Benefits of Transferring IRA

If you are considering transferring an IRA, there are also some benefits to consider.
For example:


Avoid Transfer Fees

Depending on which IRA provider you choose, you could transfer your IRA without having to pay fees.

This can make the process of transferring an IRA easier and less expensive for you.

Open Multiple Accounts at One Institution

Transferring IRA can help you open up multiple accounts at one institution.

This is ideal if you want to put different currencies or investments into separate IRA accounts.

Review Investment Options

When transferring an IRA, you have the opportunity to review the investment options available to you.

Depending on your current provider, you may be able to open up a new IRA with better investment options.

Cons of Transferring IRA

There are also some downsides and things to think about before transferring an IRA:

Availability of Investments

Make sure to find out what investments are available through the new institution before transferring your IRA.

You may not be able to find the same investments you currently have.

Trigger Taxable Event

When transferring an IRA, you will trigger a taxable event.

This means you will have to pay taxes on the money that's transferred.

Lack of Customer Service

If you're unhappy with the customer service at your current institution, transferring your IRA may not be the best solution.

Make sure to research the customer service at the new institution before transferring your money.

The Steps Involved in the Process of Transferring an IRA

There are a few steps involved in the process of transferring an IRA from one institution to another:

  • Fill out the form and include information about your old IRA, such as the name of the account holder, the account number, the institution where your old IRA is held, and the type of IRA.
  • You may also need to include a letter with contact information about your new financial institution.
  • Mail the form to your previous financial institution along with any additional documentation listed on the transfer form (such as tax forms).
  • Your previous institution will guide you through the process of transferring your IRA to your new institution.

The Bottom Line

Transferring an IRA can help you consolidate your accounts, review your investment options, avoid transfer fees and open up multiple accounts at one institution.

It's important to consider if the new IRA provider has all of the investments you need as well as look into any costs associated with transferring your money.

In addition, transferring an IRA can trigger a taxable event, so be sure to understand the implications before making a decision.

Transferring IRA FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.

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