How to move your IRA without penalties or tax consequences

You can move an IRA from one financial institution to another through a process called a trustee-to-trustee transfer, and when done correctly, it triggers no taxes and no penalties. The institution you're leaving handles most of the paperwork; you don't touch the money yourself. The whole process typically takes one to three weeks, though some custodians move faster than others.

The key is using a transfer rather than a withdrawal. If you withdraw the money and deposit it yourself, you have 60 days to complete the move or the IRS treats the withdrawal as a taxable distribution. A trustee-to-trustee transfer bypasses that risk entirely because the money never passes through your hands.

Key Takeaways

  • A trustee-to-trustee transfer moves your IRA directly between institutions with no tax bill and no 60-day deadline pressure.
  • You initiate the transfer by contacting your new institution and providing your old account details; the new custodian then requests the funds from the old one.
  • The process takes one to three weeks on average, though some brokerages complete transfers in days while others take longer.
  • You can transfer between traditional IRAs, Roth IRAs, or SEP-IRAs, but moving money from a traditional IRA to a Roth creates a taxable event that requires planning.
  • If you receive a check from your old custodian instead of a direct transfer, you must deposit it within 60 days or face taxes and penalties on the full amount.

Starting the transfer at your new institution

Contact the bank, brokerage, or investment firm where you want to move your IRA and ask for their transfer department or new account specialist. They will give you a form—sometimes called a "transfer request" or "account transfer form"—that you fill out with information about your current IRA: the custodian's name, your account number, and the account type (traditional, Roth, or SEP).

You'll also specify whether you want a full transfer of the entire balance or a partial transfer of just some of the money. Most people do a full transfer. The new institution will ask for your Social Security number, the old custodian's contact information, and authorization to request the funds on your behalf. Sign and return the form to the new institution.

Do not contact your old custodian first. The new institution handles the request. If you call your old custodian and ask them to send the money, they may issue a check to you instead of sending it directly to the new custodian, which creates the 60-day clock and unnecessary risk.

What happens after you submit the transfer request

The new institution sends a formal request to your old custodian asking them to transfer the funds. Your old custodian then liquidates your investments if necessary (converting stocks, mutual funds, or other holdings into cash), calculates any accrued interest or dividends, and wires the money directly to the new institution's account. This is the trustee-to-trustee transfer—the money moves from one custodian to another without you ever receiving it.

During this time, your investments are typically frozen at the old institution. You cannot buy or sell, and you cannot withdraw money. Once the funds arrive at the new institution, they sit in a cash account or money market fund until you decide where to invest them.

The timeline varies. Some brokerages like Fidelity or Charles Schwab complete transfers in three to five business days. Others take two to three weeks. If your old custodian is a smaller bank or credit union, or if your IRA holds unusual investments like real estate or private partnerships, the transfer may take longer because those assets cannot be easily liquidated and transferred.

Handling investments that cannot be transferred directly

Most IRAs hold stocks, bonds, mutual funds, or cash—all of which transfer easily. But some IRAs contain investments that cannot move directly between custodians, such as individual stock certificates held in your name, real estate, or private business interests. In these cases, your old custodian will liquidate the investment and send the cash proceeds instead.

Before you initiate a transfer, ask your old custodian whether all your holdings can transfer in-kind (meaning as-is, without being sold). If some cannot, ask what will be liquidated and when. You may decide to sell those investments yourself before requesting the transfer, so you control the timing and price. Alternatively, you can accept the liquidation and reinvest the proceeds at your new institution.

The 60-day rule: what to do if you receive a check

If your old custodian sends you a check instead of transferring the funds directly to the new institution, the IRS gives you 60 days to deposit that check into your new IRA. This is called a rollover, and it is riskier than a trustee-to-trustee transfer because the clock is running and you are responsible for completing the deposit.

If you miss the 60-day deadline, the IRS treats the entire amount as a withdrawal. You owe income tax on the full balance, plus a 10 percent early withdrawal penalty if you are under 59½. There is no exception for "I forgot" or "the mail was slow." The deadline is firm.

If you receive a check, deposit it immediately into your new IRA at the new institution. Do not spend it or hold it in a personal savings account. Some custodians allow you to deposit a check at a branch or through mobile deposit; others require you to mail it or use their online portal. Ask the new institution how they accept rollover deposits and whether they can confirm receipt in writing so you have proof of the deposit date.

Converting a traditional IRA to a Roth during a transfer

You can move money from a traditional IRA to a Roth IRA during a transfer, but this creates a taxable event. The amount you convert counts as income in the year of the conversion, and you owe income tax on it at your ordinary tax rate. You do not owe the 10 percent early withdrawal penalty, but you do owe the income tax.

For example, if you convert $50,000 from a traditional IRA to a Roth, you add $50,000 to your taxable income for that year. If you are in the 24 percent tax bracket, you owe roughly $12,000 in federal income tax (plus any state income tax). This is why many people convert in years when their income is lower, such as after retirement or a job loss.

A Roth conversion is a separate decision from a transfer. You can transfer a traditional IRA to another traditional IRA with no tax consequence, or you can convert to a Roth and pay tax on the conversion. Discuss the tax impact with a tax professional before you convert, because the decision depends on your current income, expected future income, and state taxes.

Transferring between SEP-IRAs and other employer plans

A SEP-IRA (Simplified Employee Pension IRA) is an employer retirement plan, and the rules for transferring it are the same as for a traditional IRA: use a trustee-to-trustee transfer and avoid touching the money yourself. However, you cannot transfer a SEP-IRA directly into a traditional IRA at most institutions—the new custodian must maintain it as a SEP-IRA.

If you are no longer self-employed or no longer work for the employer who sponsored the SEP-IRA, you may be able to convert it to a traditional IRA or roll it into a new employer's 401(k) plan. The rules vary by custodian and by plan. Contact your new institution before you initiate the transfer to confirm they can accept a SEP-IRA and what account type it will become.

Transfers from 401(k) plans, 403(b) plans, or other employer-sponsored retirement accounts into an IRA follow similar steps but may have additional requirements, such as proof that you are no longer employed by the plan sponsor. Ask both your old plan administrator and your new IRA custodian what documentation they need.

Avoiding common mistakes during a transfer

The most common mistake is withdrawing the money yourself instead of requesting a trustee-to-trustee transfer. This starts the 60-day clock and creates tax risk. Always let the institutions handle the transfer directly.

Another mistake is not confirming that the new institution received the funds. After two to three weeks, contact the new custodian and ask whether the transfer has posted. If it has not, ask for a status update from both institutions. Delays happen, and following up prevents the 60-day deadline from sneaking up on you.

A third mistake is moving money without understanding the tax consequences of a conversion. If you are converting from a traditional IRA to a Roth, or from a pre-tax employer plan to an IRA, talk to a tax professional first. The tax bill can be substantial, and you need to plan for it.

Finally, do not close your old IRA account immediately after the transfer posts. Wait a few days to confirm that all the money arrived and that there are no unexpected fees or holds. Once you are certain the transfer is complete, you can close the old account.

Frequently Asked Questions

Can I transfer an IRA if I have already taken my required minimum distribution for the year?

Yes. A trustee-to-trustee transfer does not count as a distribution, so it does not affect your required minimum distribution. However, if you have already withdrawn your RMD for the year, you cannot re-contribute it to an IRA through a transfer. Consult a tax professional if you are unsure whether your RMD has been satisfied.

How many times can I transfer an IRA?

You can do trustee-to-trustee transfers as many times as you want with no limit. The IRS limits you to one rollover (where you receive the check yourself) per IRA per 12-month period, but direct transfers between custodians are unlimited. This is why trustee-to-trustee transfers are the preferred method.

Will I lose money if my investments are sold during the transfer?

Your investments are liquidated at market value on the day your old custodian sells them. If the market drops between the day you request the transfer and the day the sale occurs, you will receive less cash. This is market risk, not a transfer fee. You can minimize this risk by requesting the transfer when you are comfortable with current market prices, or by moving only cash rather than investments.

What if my old custodian charges a transfer fee?

Some institutions charge $50 to $300 to process an outgoing transfer. Ask your old custodian about their fee before you initiate the transfer. Many new custodians will reimburse this fee as an incentive to move your account to them—ask whether they offer transfer fee reimbursement.

Can I transfer an inherited IRA?

Yes, but inherited IRAs have special rules. You must transfer an inherited IRA to another inherited IRA in the same beneficiary's name, not to a regular IRA. The new custodian will need documentation of your relationship to the original account holder. Contact both institutions before you start the transfer to confirm they can handle an inherited account.