Transfer and Rollover IRAs into an Equity Trust IRA
Take control of your retirement funds - Know Your Options
Summary
If you are leaving your current job, retiring, or just wish to have greater control over your retirement funds, it's important to know your options. At Equity Trust, we believe in giving our clients complete control over their future.
Below we have compiled a list of frequently asked questions to provide information about the process of completing a transfer or rollover of your existing IRA.
See Why Equity Trust is the Preferred Choice. If you have any further questions, please feel free to contact Equity Trust.
- Can I transfer/rollover funds from a previously established retirement plan into an Equity Trust self directed IRA?
- What are the differences between a transfer and a rollover?
- How does the transfer process work?
- Am I required to transfer my entire account?
- Do I have to liquidate investments in order to transfer assets to my self-directed IRA at Equity Trust?
- When I rollover funds from a qualified retirement plan into a Traditional IRA, is this a taxable event?
- Can I rollover funds from a qualified retirement plan if I am still employed and am a member of that plan?
- I would like to convert funds from a qualified retirement plan to a Roth IRA. Can I do this?
- Do transfer funds from a previously established IRA have to be from like accounts?
- How do I transfer/rollover funds to my self directed IRA?
- How are funds transferred to Equity Trust Company?
- Are there general guidelines for the transfer process?
- How long do transfers/rollovers take?
- Is there any way I can expedite the process?
- Can I check my account online to see the status of my account?
Can I transfer/rollover funds from a previously established retirement plan into an Equity Trust self-directed IRA?
Yes, there are several ways funds can be transferred or rolled over into an Equity Trust self-directed IRA. For instructions on how to transfer or rollover an existing IRA to a self-directed IRA account at Equity Trust, please select Transfer or Rollover in open a self-directed IRA.
What are the differences between a transfer and a rollover?
A transfer occurs when IRA assets are moved directly from one financial institution to another without the IRA owner taking possession of his/her assets. By executing a transfer, IRA owners avoid possible tax liabilities that might occur by taking possession of their funds personally. Unlike rollovers, there is no set limit to the number of transfers that can be executed in a year.
A rollover occurs when an individual requests a distribution from an IRA or a Qualified Retirement Plan and then "rolls" the assets into an IRA. There are three types of rollovers: (i.) an IRA rollover; (ii.) a Qualified Retirement Plan Rollover, and (iii.) a Qualified Retirement Plan Direct Rollover. Under federal tax law, each IRA owner is limited to one IRA Rollover in a 12-month period. On the other hand, Qualified Retirement Plan Direct Rollovers are not treated as rollovers subject to this 12-month rollover rule.
IRA Rollover - Occurs when an individual has taken a distribution personally from his/her IRA. The IRA owner has 60 days to rollover the distribution into another IRA. If the funds are not put into another IRA account, the individual shall be subject to an additional penalty tax of 10%.
Qualified Retirement Plan Rollover - Occurs when an individual takes personal possession of his/her distributions from a qualified retirement plan. The QRP rollover is a more complex procedure than the regular transfer. Once the funds have been removed, the plan administrator will withhold 20% of the distribution for tax purposes. The client receives the 80%, then has to make up the difference to his/her IRA out of his/her own pocket. The client will have to file a form with the IRS to receive the withheld funds. For these reasons, we recommend that individuals execute a Direct Rollover (see below) whenever possible to avoid possible tax liabilities and complications.
Qualified Retirement Plan Direct Rollover - The direct rollover is similar to an IRA transfer. The recipient of a qualified plan distribution chooses to have his/her distribution rolled over directly to another financial institution in order to open an IRA account with those funds. By choosing the direct rollover option, an individual lessens the possibility of complications and no tax is withheld from the distribution.
How does the transfer process work?
To transfer retirement funds to an Equity Trust self-directed IRA, you will first need to establish an account with Equity Trust.
The next step in initiating the transfer process is the completion of the Equity Trust Transfer Form. This form can be submitted along with your account establishment forms, or any time thereafter. Once the transfer form has been received with an original signature, Equity Trust will sign and submit the form to the transferring custodian.
For a step-by-step guide to the process, please select Transfer or Rollover in open a self-directed IRA.
Am I required to transfer my entire account?
No. You are in complete control and may transfer whatever amount you decide.
Do I have to liquidate investments in order to transfer assets to my self-directed IRA at Equity Trust?
Although transfer of cash is a much faster process, clients may choose to transfer assets in kind. This allows clients to maintain their current investment positions, the only difference being the registration of the asset. However, the ability to transfer assets in-kind from a tax-qualified plan will be subject to the provisions of that arrangement; therefore, you should consult with your plan administrator regarding the permissible options allowed under the tax-qualified plan.
When I rollover funds from an employer-sponsored or qualified retirement plan, do they need to go directly to a traditional IRA?
Yes. Per IRS guidelines, all rollovers from a qualified plan must be rolled over into a Traditional IRA.
Can I rollover funds from a qualified retirement plan if I am still employed and am a member of that plan?
Yes, as far as Equity Trust is concerned this is perfectly fine. But you will need to check with your plan administrator or HR department to see if this is permissible within the structure of your employer’s retirement plan.
I would like to convert funds from a qualified retirement plan to a Roth IRA. Can I do this?
Yes. Funds from other tax-qualified retirement plans can be placed into a Roth IRA. Currently the process for accomplishing such a rollover is burdensome and requires a two-step process in which the funds from the tax-qualified plan are first transferred into a Traditional IRA and are then converted into a Roth IRA. However, after January 1, 2008, such as rollover can be made directly from the tax-qualified plan into the Roth IRA. Whether the conversion is made through the two-step process (or is made directly to the Roth IRA for contributions starting in 2008), the transferred amount is subject to income taxation, but avoids the 10% early distribution penalty. You should consult with your plan administrator regarding the permissible withdrawal options allowed under the tax-qualified plan.
Do transfer funds from a previously established IRA have to be from like accounts?
Yes. For instance, if you wish to transfer funds from a Traditional IRA to an Equity Trust self-directed IRA, the funds must be transferred to a Traditional IRA.
How do I transfer/rollover funds to my self directed IRA?
The transfer/rollover process can not begin until an account is established at Equity Trust Company. Once the account is established, all that is required is a completed transfer form with an original signature. After the form has been received by Equity Trust, it will be signed and delivered to the transferring custodian. For instructions on how to transfer or rollover an existing IRA to a self directed IRA account at Equity Trust, please select Transfer or Rollover in open a self-directed IRA.
How are funds transferred to Equity Trust?
Cash funds can be transferred via check or wire (see wiring instructions). All other assets are transferred either ACATS or non ACATS.
Are there general guidelines for the transfer process?
Cash Funds Transfer From Financial Institutions - If you are transferring cash funds from a financial institution, you have two options: a check made payable to Equity Trust Company. FBO your IRA, or have the funds wired for the benefit of your account. (See wiring instructions.)
Direct Rollovers from a Qualified Plan (401k, 403b, Defined benefit, Keogh) - Direct Rollovers from Qualified Plans can be transferred ACATS or Non-ACATS. Rules and regulations vary from plan to plan. It is very important that you contact your plan administrator to be sure you are eligible to roll funds from your plan and to verify that the correct procedures are followed when removing these funds.
Mutual Fund Transfers - Generally speaking, mutual fund transfers are completed as Non-ACATS.
Brokerage Account Transfers - These transfers are generally sent via ACATS. Transfers coming from smaller firms that are not members of the NSCC are processed Non-ACATS. Proprietary funds and money market funds must be liquidated prior to transfer.
How long do transfers/rollovers take?
The portion of the account transfer process that Equity Trust is responsible for takes approximately 2-3 business days. Once the transfer form has been mailed, the speed of process is up to the transferring custodian. The entire process can range from a few days to upwards of two months.
Generally speaking, transfer/rollovers take the following amount of time:
Cash Transfers - No matter where funds are being transferred from, cash transfers take the shortest period of time, approximately 1-4 business days.
Transfer from a Brokerage Account - The amount of time expected for a brokerage account transfer is approximately 10-15 business days from the date paperwork is completed. The actual time will vary depending on the speed with which the brokerage firm responds to our request.
Transfer from a Mutual Fund - The amount of time expected for a mutual fund transfer is approximately 14-21 days after the paperwork is received. The actual time will vary, depending on the speed with which the mutual fund responds to the transfer request.
Direct Rollovers from a Qualified Plan - The amount of time expected for a direct rollover from a Qualified Plan is approximately 7-60 days. The actual time will vary depending on the speed with which your qualified plan administrator responds to the transfer request.
Is there any way I can expedite the process?
Yes, there are several ways you can expedite the transfer process:
- Let your current custodian know ahead of time about the request.
- If you plan on liquidating stocks or funds once they have been transferred to Equity Trust, you might want to consider enacting this sale with your current custodian. Re-registration of funds and stocks generally takes a longer amount of time than cash transfers or wires.
- Stay on top of the process and be in regular communication with the transferring institution. Remember, these are your funds.
Can I check my account online to see the status of my account?
Yes. Once your account has been opened and you have your own Client Access PIN (personal identification number) you can check the status of your transfer - or feel free to contact Equity Trust.