Qualified retirement plans—such as 401(k)s—that were sponsored by a previous employer can be rolled over to a self-directed IRA in a few easy steps. However, minor factors can delay your rollover. Use the tips below to help ensure your new self-directed IRA is set up quickly and easily.
1. Follow rollover rules by account type
Before you initiate a direct rollover from your current employer plan (e.g., 401(k), profit sharing, or deferred compensation), make sure your account type is eligible for rollover to a self-directed IRA. Speak with your tax professional and review the IRS Rollover Chart.
2. Liquidate publicly traded assets
If you are currently invested in publicly traded assets, such as stocks or mutual funds, you will need to sell or “liquidate” your current holdings before a rollover can be processed. This sale enables the current custodian or administrator to send funds in the form of a check or wire to your self-directed IRA.
3. Address outstanding fees
Before requesting your rollover, make sure your current retirement account does not have any outstanding fees (such as termination fees). If outstanding fees need to be collected, your direct rollover request may be declined. Alternatively, any past due balance may be deducted from the amount you requested, resulting in a smaller rollover amount than you requested.
4. Complete all forms correctly
It is not unusual for a custodian or administrator to decline a rollover request due to missing, incomplete, or inaccurate information on forms. Every company has a unique form and different requirements for requests. Review the form and run it by a representative at your current custodian or administrator to ensure everything is in good order. Complete every required field and ensure that all signatures are dated within the last 30 days.
5. Communicate consistently
After you have submitted a request to your current custodian or administrator, review your account online with them to monitor the status of the rollover. If you do not see any movement of assets or funds by the fifth business day, contact them to ensure they received your request and that all forms are in good order. It is a good idea to maintain communication with your current custodian or administrator until the rollover is complete.
6. Certify your qualified IRA rollover
If you are rolling your account into a self-directed IRA with Provident Trust Group, you’ll need to complete the IRA Rollover Certification Form and submit it to email@example.com when the check or wire is on its way to us from your previous custodian or administrator. Once the funds arrive, we can then promptly and accurately allocate them as a rollover contribution to your self-directed IRA. If we don’t receive this form in a timely manner, it may delay your investment selection and processing.
Always consult with your financial or tax professional before proceeding with any type of rollover to ensure you choose the one that’s best for you. You can review additional rollover tips from the IRS here.
This material is provided for general educational and informational purposes only and should not be considered to be legal, tax or investment advice. Provident Trust Group, LLC is a non-discretionary, passive, directed custodian that does not sell or solicit investments and does not provide investment advice or recommendations. Provident Trust Group, LLC is not obligated to review and does not endorse any investment or investment advisor, and individuals are responsible for the investments in their accounts. Consult with a tax and/or financial advisor to determine what may be best for your individual needs.