Transferring your Individual Retirement Account (IRA) to a new provider like Vanguard can be a strategic move to potentially reduce fees, simplify your investments, and gain access to a wider range of low-cost funds. While the process may seem daunting, it's a straightforward series of steps. This lengthy guide will walk you through everything you need to know to successfully move your IRA to Vanguard.
Ready to take control of your retirement savings?
If you've been considering consolidating your retirement accounts or want to tap into Vanguard's renowned lineup of low-cost index funds and ETFs, you're in the right place. Moving your IRA can be a fantastic way to streamline your finances and set yourself up for long-term success. Let's get started on this journey together.
Step 1: Understand the Types of IRA Transfers
Before you do anything, it's crucial to understand the different ways you can move your IRA. This is not a one-size-fits-all process. The method you choose can have significant implications for taxes and penalties.
Direct Rollover (or Trustee-to-Trustee Transfer): This is the most recommended and common method. In a direct rollover, your current IRA provider (the "sending" firm) sends the funds directly to your new Vanguard IRA (the "receiving" firm). You never touch the money. This is the safest way to ensure your funds maintain their tax-advantaged status. The assets can often be transferred "in-kind," meaning your investments (stocks, ETFs, etc.) are moved without being sold, so you stay invested in the market.
Indirect Rollover: With an indirect rollover, your current provider sends the money to you in the form of a check. You then have a 60-day window to deposit that money into your new Vanguard IRA. If you miss this deadline, the IRS will consider the withdrawal a taxable distribution, and you may be subject to income tax and a 10% early withdrawal penalty if you are under 59½. This method is risky and should be avoided unless absolutely necessary.
Asset Transfer: This is the term Vanguard uses when you transfer an existing IRA from another brokerage, like Fidelity or Charles Schwab, to a Vanguard IRA. This is also a form of a direct rollover.
Important: Make sure you are transferring a Traditional IRA to a Traditional IRA, or a Roth IRA to a Roth IRA. Transferring between unlike account types can have serious tax consequences.
Step 2: Prepare Your Account Information and Documents
This step is all about gathering the necessary paperwork to make the transfer as smooth and swift as possible. Without this information, you could face delays.
Sub-heading: What You Need from Your Current Provider
Before you initiate the transfer with Vanguard, you need to have a clear picture of your current IRA. You'll need:
Your current IRA account number.
A recent account statement (dated within the last 90 days). This is vital as it shows your account balance and what investments you hold.
The full name and contact information of the sending firm (e.g., Fidelity, Charles Schwab).
The types of assets you hold in the account (e.g., stocks, bonds, mutual funds, ETFs). Be aware that some proprietary mutual funds from other brokerages may not be transferable and will need to be sold and transferred as cash.
Sub-heading: What You Need for Your New Vanguard Account
If you don't already have a Vanguard IRA, you'll need to open one. This can be done as part of the transfer process. You will be asked for:
Your Social Security Number or Taxpayer Identification Number.
Your date of birth.
Your contact information (address, phone number, email).
Your employment information.
Step 3: Initiate the Transfer with Vanguard
This is where the magic happens! The easiest and most efficient way to do this is to start the process on the Vanguard website.
Sub-heading: Starting the Online Transfer
Go to the Vanguard website and select "Open an account" or "Transfer an account". You'll typically find a clear, easy-to-use section dedicated to transfers and rollovers on their homepage or within the "Invest with us" section.
Select the type of account you want to transfer. You will be given options like "Transfer an IRA," "Roll over an employer plan," or "Transfer a nonretirement account." Choose "Transfer an IRA."
Indicate whether you are a new or existing Vanguard client. If you are new, you will be guided through the account opening process. If you are an existing client, you will log in to your account.
Connect your old account. You will be prompted to enter the name of your current financial institution (e.g., Fidelity, Schwab) and your account number. Some platforms allow you to connect electronically by entering your username and password for the old account, which can significantly speed up the process.
Choose whether to transfer all or some of your assets. If you want to transfer everything, select "full transfer." If you only want to move a portion, select "partial transfer" and specify the assets.
Review and submit. The system will generate a pre-filled transfer form for you to review. Read it carefully to ensure all the details are accurate.
Accept the agreements. You will need to agree to the terms and conditions.
Sub-heading: What Happens Next?
Once you submit the online request, Vanguard will take over. They will contact your current brokerage to request the assets. This is the Direct Rollover in action. You will receive email notifications and can often track the progress of your transfer online.
Important Note on Paperwork: In some cases, especially if your current provider doesn't support a fully electronic transfer, you may be required to print, sign, and mail a transfer form along with a recent account statement. If this is the case, Vanguard will provide the pre-filled form for you.
Step 4: Monitor and Confirm the Transfer
The transfer isn't complete until you see the funds in your Vanguard account. Be proactive and check the status.
Track the transfer: Vanguard's website has a "Track Your Transfer" tool where you can monitor the progress.
Confirm with both firms: After a week or two, you can call both your old provider and Vanguard to confirm the status. A typical transfer can take anywhere from 5 to 10 business days, but it can take longer if paperwork is required.
Check your new account: Once the transfer is complete, log in to your new Vanguard IRA and confirm that all the assets have arrived correctly.
Re-invest your cash: If your assets were liquidated and transferred as cash, don't forget to invest them! Your money will be sitting in a settlement fund (like a money market account) until you choose your investments.
Step 5: Select Your New Investments
This is the fun part! Now that your IRA is at Vanguard, you can take advantage of their investment options.
Explore Vanguard's offerings: Vanguard is famous for its low-cost index funds and ETFs. You can choose from a wide variety of funds that track broad market indexes, like the S&P 500, or diversify with international and bond funds.
Consider a Target-Date Retirement Fund: If you want a hands-off approach, a Vanguard Target-Date Fund is a fantastic option. It automatically rebalances your portfolio over time, becoming more conservative as you approach retirement.
Align with your goals: Choose investments that align with your risk tolerance and long-term financial goals.
10 Related FAQ Questions
How to transfer an IRA from Fidelity to Vanguard?
You can initiate an online transfer from Vanguard's website. You will need your Fidelity account number and a recent statement. Vanguard will coordinate directly with Fidelity to move the assets.
How to avoid fees when moving an IRA to Vanguard?
Vanguard typically does not charge a fee for incoming transfers. However, your current brokerage may charge a transfer-out or account closure fee (often around $75-$100). Check with your current provider beforehand.
How to do a partial transfer of an IRA?
During the online transfer process on the Vanguard website, you will be given the option to select a full or partial transfer. Choose partial and specify which assets you want to move.
How to roll over a 401(k) to a Vanguard IRA?
The process is very similar to moving an existing IRA. You will select "Roll over an employer plan" on the Vanguard website. Your employer's plan administrator will send a check directly to Vanguard.
How to transfer a Roth IRA to Vanguard?
The steps are identical to transferring a Traditional IRA. You will simply select "Roth IRA" as the account type you are transferring from and to.
How to find my Vanguard IRA account number?
Your account number can be found on your account statement or by logging in to your Vanguard account online.
How to track my IRA transfer to Vanguard?
You can use the "Track Your Transfer" feature on the Vanguard website after initiating the transfer. You can also call Vanguard's customer service for updates.
How to transfer assets "in-kind" to Vanguard?
During the transfer request, you can usually specify to move assets "in-kind." This means the holdings themselves (e.g., shares of a stock or ETF) are moved, not liquidated into cash.
How to contact Vanguard's rollover and transfer department?
For personal investors, you can call Vanguard's Client Services team at 877-662-7447 from 8 a.m. to 8 p.m. ET, Monday to Friday.
How to handle a check received from an indirect rollover?
If you receive a check made out to you, you must deposit it into your new Vanguard IRA within 60 days to avoid a taxable event. You can often do this via a mobile check deposit through the Vanguard app or by mailing it to them.
