Many people contribute to multiple Traditional and Roth IRAs every year. This can cause you to accumulate money in several different financial settings, including your bank, with your broker, insurance agent or accountant. There are many benefits associated with combining IRAs. These include reduction of the number of account statements you receive and have to file, elimination of costs arising from paying multiple custodian fees, broader investment selection, easier performance tracking and simpler minimum distribution calculations.
Step 1
Decide which IRA account you wish to continue receiving as well as the IRAs you would like to transfer. You should select an IRA that has few or no annual fees or one where your investment consultant or financial adviser already manages your other assets to eliminate having to consult with multiple people about your investments.
Step 2
Fill out a transfer form for your chosen IRA custodian for every IRA you want to transfer to this primary account. Submit the transfer forms to this your current IRA custodian. Indicate whether each transfer is going to be "in cash" or "in kind." Choose the "in cash" option if you want to sell all your current IRA holdings and transfer cash balances. Choose the "in kind" option if you wish to keep your IRA holdings intact.
Step 3
Wait for between one and two weeks for your transfer requests to get processed. Make sure your balances arrive in your pre-specified form. Contact the custodians you are transferring accounts from if you receive checks that are made payable to you, as these are distributions (not transfers) and thus taxable income sent to you by mistake.
Step 4
Check all of your former IRA accounts after your transfers become completed to determine if any residual interest accrued following your transfers. If this is the case, your old accounts will not close and cause you to receive statements from these accounts showing very small balances in every account. You will need to transfer these funds to your new account and to make sure to properly close your old accounts if this happens to you.
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