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Author Topic: Churning IRA accounts?  (Read 3164 times)

Arktinkerer

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Churning IRA accounts?
« on: April 04, 2015, 06:43:09 PM »
Been lurking a while.  Great site! 

Saw the info on churning credit cards.  I wondered if anyone had engaged in churing their IRAs?  Several offer $500 or more for opening an IRA.  Looking at stepping away from corporate world soon and was thinking of rolling the 401K to multiple IRAs and then consolidating after a year.  Percentage wise it may be small but picking up a couple thousand dollars for a couple phone calls is nothing to ignore.

Not sure if you couldn't continue to do this every year or two...
« Last Edit: April 04, 2015, 06:48:24 PM by Arktinkerer »
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retireatbirth

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Re: Churning IRA accounts?
« Reply #1 on: April 04, 2015, 06:49:59 PM »
I think the IRS limits your rollovers between IRAs, but not 100% sure if the details.
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bdoubleu

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Re: Churning IRA accounts?
« Reply #2 on: April 04, 2015, 09:09:03 PM »
Quote from: retireatbirth on April 04, 2015, 06:49:59 PM
I think the IRS limits your rollovers between IRAs, but not 100% sure if the details.

I'm pretty sure the limit is on indirect rollovers.  So that limit does not apply to direct rollovers.

http://www.irs.gov/Retirement-Plans/IRA-One-Rollover-Per-Year-Rule
Quote
Direct transfers of IRA money are not limited
This change won’t affect your ability to transfer funds from one IRA trustee directly to another, because this type of transfer isn’t a rollover (Revenue Ruling 78-406, 1978-2 C.B. 157). The one-rollover-per-year rule of Internal Revenue Code Section 408(d)(3)(B) applies only to rollovers

OP, sounds like it could be a lot of work keeping track of things, especially if you churn multiple accounts, but theoretically it could work.
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SaintM

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Re: Churning IRA accounts?
« Reply #3 on: April 04, 2015, 10:08:46 PM »
There is almost always a fee for closing IRA accounts and moving assets out.  This will eat into your new account bonuses.
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themagicman

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Re: Churning IRA accounts?
« Reply #4 on: April 04, 2015, 10:12:58 PM »
I just rolled my IRA over to a new provider and it took about 2 weeks total out of the market. I lost a lot on the market gains during that time being out of the market. I do not think this is worth it.
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electriceagle

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Re: Churning IRA accounts?
« Reply #5 on: April 05, 2015, 12:09:16 AM »
Quote from: themagicman on April 04, 2015, 10:12:58 PM
I just rolled my IRA over to a new provider and it took about 2 weeks total out of the market. I lost a lot on the market gains during that time being out of the market. I do not think this is worth it.

You should be able to transfer securities directly from one provider to another, especially if you use Vanguard ETFs instead of mutual funds.
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