Author Topic: New investor: Moving funds from one Roth IRA to another?  (Read 3354 times)

MVal

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New investor: Moving funds from one Roth IRA to another?
« on: May 22, 2015, 09:52:50 AM »
What is the best way to transfer funds from one IRA to another? I thought I could avoid the $50 closure fee at Merrilll Edge they told me they'd charge if I transferred my whole account elsewhere but just leaving a few hundred there, but is that not the best route? Would I actually have to do some kind of "rollover" if I didn't close the account and is that really worth the trouble?

I am new to investing and I am not really sure what all these terms mean and what kinds of headaches I might be in for if I don't do this properly. I want to transfer my account worth about $7600 from Merrill Edge to Vanguard. How do I not get dinged with fees?

zephyr911

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Re: New investor: Moving funds from one Roth IRA to another?
« Reply #1 on: May 22, 2015, 11:17:52 AM »
What is the best way to transfer funds from one IRA to another? I thought I could avoid the $50 closure fee at Merrilll Edge they told me they'd charge if I transferred my whole account elsewhere but just leaving a few hundred there, but is that not the best route? Would I actually have to do some kind of "rollover" if I didn't close the account and is that really worth the trouble?

I am new to investing and I am not really sure what all these terms mean and what kinds of headaches I might be in for if I don't do this properly. I want to transfer my account worth about $7600 from Merrill Edge to Vanguard. How do I not get dinged with fees?
I'm assuming your current account has some kind of annual fee associated with it. How long will you hold it before you pay back that "saved" $50 in other fees? At my last IRA company, I paid $25/yr per account in addition to any transaction fees, so I wouldn't have left money there to save $50 when I planned to have the account for decades.

Just my $.02: keep things simple, take the $50 hit, and skip a $50 expense this month if it bothers you that much. It's one less thing to keep track of, and all your (remaining) money is right where you want it.

forummm

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Re: New investor: Moving funds from one Roth IRA to another?
« Reply #2 on: May 22, 2015, 11:58:23 AM »
Unless they change their policy, you (or your heirs) are going to get dinged by that $50 fee whether you close it now or later. And in the meantime, they are probably charging you 1% expense ratios for your funds instead of the 0.05% expense ratio you could get at Vanguard. If so, you would save that $50 in under a year by switching. Just do it.

dandarc

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Re: New investor: Moving funds from one Roth IRA to another?
« Reply #3 on: May 22, 2015, 12:02:26 PM »
Call Vanguard - they can walk you though the transfer itself.  And agree, $50 is worth it for the simplicity.

MVal

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Re: New investor: Moving funds from one Roth IRA to another?
« Reply #4 on: May 29, 2015, 10:37:51 AM »
Thank for the input, everyone. I didn't think about the fees I might be charged over the years if I keep the Merrill Edge Roth open. I haven't even invested any of the funds in my Merrill Roth, so I think switching the whole thing to Vanguard will be smart.

Cathy

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Re: New investor: Moving funds from one Roth IRA to another?
« Reply #5 on: May 29, 2015, 10:41:17 AM »
This topic is governed by 26 USC 408A(e)(1), which is notable for its grammatically-lacking sentence structure and somewhat ambiguous meaning. Further investigation of that is left as an exercise to the reader.

MoneyCat

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Re: New investor: Moving funds from one Roth IRA to another?
« Reply #6 on: May 29, 2015, 10:45:22 AM »
This topic interests me as well.  Right now, I am paying 1.25% and it is absolutely killing my capital gains.  I started a taxable account with Vanguard and I earn so much more that way with a lot fewer fees.

Frankies Girl

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Re: New investor: Moving funds from one Roth IRA to another?
« Reply #7 on: May 29, 2015, 11:08:48 AM »
Most places will ding you on the way out (although that did not happen on my taxable accounts, just the tax deferred ones... weird). Transfer or closing account fees - I had one charge me $125 to get away from them. I figured it was money well spent. You're going to make that money back in a month or two just in not paying the stupid management fees.

Ask the place you're moving to if they will rebate you the closing fee from the other company. I was lucky enough to get some money back in part when I moved over because they really wanted my accounts, so if you have a decent sized portfolio, they might do that to make you happier about the switchover.


forummm

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Re: New investor: Moving funds from one Roth IRA to another?
« Reply #8 on: May 29, 2015, 12:21:59 PM »
This topic is governed by 26 USC 408A(e)(1), which is notable for its grammatically-lacking sentence structure and somewhat ambiguous meaning. Further investigation of that is left as an exercise to the reader.

Is it really that rare to find grammatically-lacking sentence structure and somewhat ambiguous meaning in the USC?