06 May How to consolidate multiple IRAs
Q. I have four IRAs and they’re all at different fund companies. I’m thinking about moving them all to the same company like a Schwab, but I want to keep the same investments. How would that work?
A. Consolidating your accounts to one custodian is very possible, and it’s probably a smart move.
Having one account is usually a good choice as you are likely to save on fees and it will help you to more clearly see how your investments are doing, said Anthony Vignier, a certified financial planner and attorney with Vignier Investment Group in Kearny.
He said you must do what is called an in-kind account transfer.
Start by contacting Schwab and get the correct account transfer forms, Vignier said.
“The forms should specifically state that you are doing an IRA-to-IRA transfer,” he said. “With an in-kind account transfer, the assets in the IRA will remain in place as the entire account moves to the new IRA custodian.”
Be sure to keep all copies of all transfer paperwork.
Vignier said you should double-check with a representative from Schwab that all the paperwork is in order after it is submitted to avoid any mistakes that can open you up to IRA premature withdrawal penalties.
“Also, you should contact the other institutions that you are pulling your IRAs from beforehand and ask if there are any withdrawal fees,” Vignier said. “Some institutions can assess fees to your account when you close an account.”
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This post was first published in May 2016.NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.