My Retirement Blog

Thinking about transferring your Roth IRA from one brokerage to another? The easiest way to do this is to make a direct brokerage to brokerage transfer. If you simply withdraw your funds, you have the added burden of having to report the non-taxable distribution on your tax return and then show that you’ve contributed the funds back into a Roth IRA. The reason you will have to do this is because your first Roth IRA custodian didn’t know that you were just transferring the funds, they think you withdrew it. In the next few weeks (end of January), they’ll send you a 1099-R showing that you took a withdrawal when in fact you withdrew just to transfer the funds.

This is similar to the type of situation that happens when you roll over a 401(k) into an IRA. Be sure to do a trustee to trustee transfer so that you don’t run into this problem. If you have any questions, simply ask the brokerage firms on both sides how they handle this sort of thing and they will help you out.

• Withdraw From Tax Deferred Accounts Last
• Rollover Your 401(k) Directly Into Roth IRA
• What Is The Roth 401(k)?
• Order of Retirement Withdrawals
• Roth 401k vs. Regular 401k