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Investor Insights Blog|Get Started with a Traditional or Roth IRA in 3 Easy Steps

Managing Your Account

Get Started with a Traditional or Roth IRA in 3 Easy Steps

Whether opening an IRA for the first time or establishing an IRA at Equity Trust Company to increase your investment possibilities, follow this simple three-step process to get started.

How to Open an IRA at Equity Trust

Step 1: Open Your Account

You can open your Equity Trust account online in less than five minutes with the Account Open Wizard in the account management system myEQUITY [LINK].

What you’ll need:

  • Personal information including your name, Social Security number, date of birth, legal address, phone number, and email address
  • Proof of ID, such as a copy of your driver’s license
  • How you will fund your account

After providing the required information, you will conduct a final review, approve with eSignature and complete your new account application.

 

What’s next?

Equity Trust Company will process your application and establish your new IRA within 24 hours. You will then receive a welcome call to walk you through your new account and complete your method of funding (if applicable). You will also receive a robust welcome package in the mail to maximize your experience with Equity Trust Company.

 

Step 2: Fund Your Account

There are three main ways to fund your Traditional or Roth IRA:

Out-of-Pocket Contribution: Assuming you qualify, you can make a contribution to your IRA from your personal checking or savings account, or with a credit card payment. This funding method is subject to maximum contribution limits set by the IRS each year. Equity Trust requires a minimum contribution of $500 to open a new self-directed IRA.

Transfer: If you have an existing Traditional IRA or Roth IRA at another financial institution, it’s possible to transfer your IRA to your newly established self-directed IRA at Equity Trust. During a transfer, funds and/or assets from your existing IRA at the current financial institution are moved directly to a compatible account at Equity Trust (Traditional IRA to Traditional IRA or Roth IRA to Roth IRA). Unlike out-of-pocket contributions, there are no limits on the amount you can transfer.

Transfers can be initiated online with the myEQUITY Transfer Wizard. You have the option to complete a full or partial transfer and may also transfer existing assets, in addition to cash balances. Once you initiate a Transfer request, we’ll work with your current provider to complete the transfer. In some instances, you may be required to initiate all or part of your transfer with your current custodian.

Rollover: If you have a qualified plan from a previous employer, such as a 401(k), 403(b), 457, Thrift Savings Plan, or other qualified plan, you would conduct a rollover. A rollover involves moving funds from a qualified plan to an IRA and typically occurs when the account owner receives a personal distribution from their previous employer or current provider of their plan and deposits it into the new account.

This process is started by requesting a rollover from your previous employer or current plan administrator, along with instructions to send the funds to Equity Trust. Your current plan administrator will provide the documentation needed to process your request.

After receiving the distribution, the account owner has 60 days to deposit, or “roll over,” the funds into a new account. It may be possible to request a direct rollover, where your plan administrator makes the payment directly to your new account. Contact your plan administrator for instructions. As with transfers, it’s possible to do a full or partial rollover of cash and/or assets.

It’s also important to note that you are limited to one rollover within a one-year period. This limitation does not apply to direct transfers from one IRA trustee directly to another. Check irs.gov for more information.

These options are not mutually exclusive – it’s possible to fund your IRA by one, two, or a combination of all three methods.

Another option: conversion

Additionally, it may be possible to fund a Roth IRA through a Roth conversion.

This process involves converting funds and/or assets from a tax-deferred account (such as a Traditional IRA, SEP IRA, SIMPLE IRA, 401(k), or other tax-deferred plan) to a Roth IRA. Because you are converting from a tax-deferred account to an after-tax Roth IRA, the amount of the conversion is added to your ordinary income in the year of the conversion and subject to ordinary income tax. Because it is a taxable event, it’s important to consult with a CPA, tax attorney, or other financial professional when considering a Roth conversion.

To facilitate a Roth conversion, both a Traditional IRA and a Roth IRA would be established at Equity Trust. The tax-deferred account(s) would then be transferred and/or rolled over from your current financial institution(s) to your newly established Traditional IRA at Equity Trust.

You can then initiate a transfer from your Traditional IRA at Equity Trust to your Roth IRA to complete the conversion. If completing a full conversion, your Traditional IRA would then be closed after the conversion is complete and your Roth IRA is funded and ready to invest. Conversions are reported on IRS Form 8606, Nondeductible IRAs. See IRS Publication 590-A for more information.

Note: Even if you exceed the income limits to be eligible to contribute to a Roth IRA out of pocket, you still may be able to convert to a Roth IRA.

Watch: 3 Ways to Fund a Self-Directed IRA

Step 3: Enjoy Investment Freedom

Once your account is open and funded, you are ready to invest. At Equity Trust Company, you direct all investments for your account with the freedom and flexibility to diversify your portfolio with both alternative and traditional assets.

myEQUITY makes it easy to invest online and delivers a clear line of sight before, during and after each investment process with around-the-clock access from any device.

Simply log in to myEQUITY, select the type of investment you wish to make and let the online wizards walk you through a streamlined process.

Before you can begin to invest, it’s critical to open and fund your account. Call 855-673-4721 or open your account online to get started today!

1

How do I roll over funds to my self-directed IRA?

After you open your account with Equity Trust, you will contact your previous employer regarding the required paperwork to roll over an IRA. In most cases this will include account numbers and balances. If you do not have that information, an Equity Trust specialist can contact your previous employer or plan administrator while you are on the line. Then you will complete all paperwork received from the plan administrator and ask the plan administrator to transfer your retirement assets to your new Equity Trust IRA account number.

If the plan administrator for your previous employer’s plan requires Equity Trust to complete a portion of the distribution form, please mail it to Equity Trust Company along with the most current plan statement. Equity Trust will complete the required sections and mail the paperwork to the plan administrator.

2

How long do rollovers take?

The portion of the account rollover process that Equity Trust is responsible for takes approximately two to three business days. The amount of time expected for a direct rollover from a qualified plan is approximately seven to 60 days. The actual time will vary depending on the speed with which your qualified plan administrator responds to the transfer request.

3

How long do transfers take?

The portion of the account transfer process that Equity Trust is responsible for takes approximately two to three 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, transfers 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 one to four business days.
  • Transfer from a Brokerage Account- The amount of time expected for a brokerage account transfer is approximately 10 to 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 to 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.

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