Roth IRA to a Roth IRA Conversion

[Guest Drew1776]

This is probably a very basic question but I can't seem to find the answer.

3 months ago I opened a Roth IRA at my bank. I would like to move that to a Roth IRA at a brokerage. Can I move that money? or do I have to wait a full year after I open the account?

BTW I have other Roth IRA accounts that I have had open for 8 months now (those are all ok)

[Guest redlenses]

You can move it anytime you want - to the IRS all of your IRAs of the same type (Roth vs. Traditional) are treated as one (you can have them spread accross 5 banks and brokerages or at just one - makes no difference) regarless of location. The only thing the IRS cares about is that you report your contributions each year (for all IRAs), not where they were opened or are currently held.

BTW your title is misleading - conversion is a term used for a different type of transaction in the IRA world. You are not converting anything here, just moving your account.

[txdd]

Be sure to check on any fees the bank might have for IRA transfers. If they charge for trustee to trustee transfers (That's where the bank send the money directly to the broker.), you could consider a rollover (That's where you withdraw the money and deposit it with the broker within 60 days.).

Transfers are cleaner and unlimited. Rollovers can't be repeated on the same accounts for 12 months, and some brokers resist accepting rollovers. Rollovers must also be reported on your tax return (but no tax).

Re the previous reply, Roth contributions are not reported to the IRS by the owner, only by the custodian.

[Guest Drew1776]

Hey thanks for the help! I just want to be sure about the transferring thing. How many transfers are one entitled to per year? It sounds like you're saying unlimited is this true?

As far as the misleading title sorry about that.

Thanks,

Andrew

[John G]

Sounds like you only need 1 transfer. The direct custodian to custodian would be the best approach... and these have no limit, although its hard to figure how many people need more than one. ALSO, depending upon the new custodian and the size of the account, the brokerage or mutual fund may refund and exit fees you incur from custodian number 1.