A Comprehensive Guide to Transferring Your IRA from Edward Jones to Vanguard
Are you considering moving your IRA from Edward Jones to Vanguard? Perhaps you're looking for lower fees, more diverse investment options, or a more hands-on approach to managing your retirement savings. Whatever your reasons, this guide will walk you through the process step by step, ensuring a smooth and tax-efficient transfer. It might seem daunting, but with the right information, you can empower yourself to take control of your financial future!
Step 1: Engage and Assess Your Current Edward Jones IRA
First things first, let's get a clear picture of what you're working with. This isn't just about knowing your account number; it's about understanding the nuances of your Edward Jones IRA.
Sub-heading 1.1: Gather Essential Information
- Locate your most recent Edward Jones IRA statement. This document is your treasure map, containing vital details like your account number, the exact type of IRA (Traditional, Roth, SEP, SIMPLE), and a list of your current holdings (stocks, mutual funds, bonds, etc.).
- Identify your investment holdings. Take note of whether your investments are primarily Edward Jones proprietary mutual funds or other securities. This will be important later when considering "in-kind" transfers versus liquidating to cash.
- Review any outstanding fees or charges. Edward Jones, like many brokerage firms, may have account closure or transfer-out fees. It's crucial to understand these upfront to avoid surprises. Call your Edward Jones advisor or client service to inquire specifically about these fees.
Sub-heading 1.2: Understand Your "Why"
Before you initiate any transfer, take a moment to solidify your reasons. Are you looking to:
- Reduce management fees? Vanguard is known for its low-cost index funds and ETFs.
- Gain more control over your investments? Vanguard offers a wide array of self-directed investment options.
- Simplify your financial life? Consolidating accounts can make tracking your retirement savings easier.
Having a clear objective will help you navigate the process with confidence and ensure you're making the right move for your financial goals.
Step 2: Open Your Vanguard IRA Account
This is where you begin setting up your new home for your retirement funds.
Sub-heading 2.1: Choose the Right IRA Type
Ensure you open the same type of IRA at Vanguard as you have at Edward Jones.
- If you have a Traditional IRA at Edward Jones, open a Traditional IRA or a Rollover IRA at Vanguard.
- If you have a Roth IRA at Edward Jones, open a Roth IRA at Vanguard.
- If you have a SEP IRA or SIMPLE IRA, confirm Vanguard offers the equivalent and open that type.
Why is this critical? Transferring between different IRA types (e.g., Traditional to Roth) is considered a conversion and has significant tax implications. We're aiming for a direct transfer to maintain the tax-deferred or tax-free status of your funds.
Sub-heading 2.2: Gather Necessary Personal Information
To open your Vanguard account, you'll typically need:
- Your Social Security Number (SSN)
- Your date of birth
- Your employer's name and address
- Your bank account and routing numbers (for initial funding, if desired, or for future contributions/withdrawals)
Sub-heading 2.3: Initiate the Account Opening Process
You can typically open a Vanguard IRA online or by phone.
- Online: Visit Vanguard's website (investor.vanguard.com) and look for options like "Open an account" or "Roll over an employer plan/transfer an IRA." The online process is generally straightforward and can take around 10-15 minutes.
- By Phone: If you prefer speaking to a representative, call Vanguard's client services. They can guide you through the application and answer any specific questions.
During the application, you may be asked to choose a settlement fund. This is where your cash will reside temporarily before you invest it. A money market fund is a common choice.
Step 3: Initiate the Transfer (The Most Important Step!)
This is where the actual movement of assets begins. Always initiate the transfer from the receiving institution (Vanguard) rather than the sending institution (Edward Jones). This is called an "ACATS" (Automated Customer Account Transfer Service) transfer, or a "direct trustee-to-trustee" transfer, and it's the safest and most common method.
Sub-heading 3.1: Contact Vanguard's Transfer Department
Once your Vanguard IRA account is open, or even during the opening process, inform them you wish to transfer an IRA from Edward Jones. Vanguard will provide you with the necessary forms.
Sub-heading 3.2: Complete the Transfer of Assets (TOA) Form
This is the core document for your transfer. Vanguard will likely provide you with a pre-filled or partially-filled form. You'll need to:
- Provide your Edward Jones IRA account number. Double-check this!
- Specify the type of IRA you are transferring. (Traditional, Roth, etc.)
- Indicate a "full" or "partial" transfer.
- Full Transfer: This is usually the simplest as it closes your Edward Jones IRA.
- Partial Transfer: If you only want to move a portion of your funds, you'll need to specify which assets or a specific dollar amount. This can be more complex and may leave a small balance at Edward Jones, potentially incurring ongoing fees.
- Choose "In-Kind" or "Liquidate to Cash":
- In-Kind Transfer: This means your existing investments (stocks, ETFs, mutual funds) are transferred as is to Vanguard. This is generally preferred to avoid selling and then repurchasing investments, which could trigger capital gains (though not in an IRA unless it's a Roth and you're withdrawing gains prematurely) or transaction fees. However, ensure Vanguard supports all your Edward Jones holdings. If Edward Jones proprietary mutual funds are not available at Vanguard, they will have to be liquidated.
- Liquidate to Cash: Your Edward Jones investments are sold, and the cash is transferred to Vanguard. This is simpler if you want to completely rebalance your portfolio at Vanguard or if your Edward Jones holdings are not available at Vanguard.
- Sign and date the form. Ensure your signature matches the signature on file with Edward Jones to avoid delays.
Sub-heading 3.3: Submit the Paperwork to Vanguard
Vanguard will then send the request to Edward Jones on your behalf. You typically do not need to contact Edward Jones yourself to initiate the transfer. Vanguard handles the communication.
Step 4: Monitor the Transfer Process
Once the paperwork is submitted, the waiting game begins. This phase is crucial for ensuring everything goes smoothly.
Sub-heading 4.1: Track Your Transfer
- Vanguard's Online Portal: Most financial institutions offer an online portal where you can track the status of your transfer. Utilize this feature regularly.
- Communication with Vanguard: If you have questions or see delays, don't hesitate to call Vanguard's transfer department. They are your primary point of contact during this process.
- Expected Timeline: A direct IRA transfer typically takes 5 to 10 business days to complete, though some requests can take longer, especially if there are complexities with specific investments or missing information.
Sub-heading 4.2: Be Prepared for Potential Hiccups
- "Not in Good Order" (NIGO): This means there's an error on the paperwork (e.g., mismatched signature, incorrect account number). Vanguard will notify you if this happens, and you'll need to correct and resubmit the form.
- Edward Jones Fees: If Edward Jones has a transfer-out fee, it will typically be deducted from your account balance before the remaining funds are sent to Vanguard.
- Liquidation of Non-Transferable Assets: If you opted for an "in-kind" transfer but some of your Edward Jones holdings are not supported at Vanguard, Edward Jones will liquidate those specific holdings to cash and transfer the cash.
Step 5: Confirm and Reinvest at Vanguard
The final stretch! Once your funds arrive at Vanguard, you'll need to confirm and then put your money to work.
Sub-heading 5.1: Verify the Transfer
- Check your Vanguard account statement: Confirm that the full amount of your IRA has been successfully transferred from Edward Jones.
- Review the transferred assets: If you did an "in-kind" transfer, ensure all the specified securities have arrived. If you liquidated to cash, confirm the cash balance.
Sub-heading 5.2: Invest Your Funds
If your assets were transferred as cash, they will typically sit in the Vanguard settlement fund (usually a money market fund). This cash is not invested in the market and will not grow until you instruct Vanguard to purchase investments.
- Research Vanguard's offerings: Explore Vanguard's wide range of low-cost index funds, ETFs, and mutual funds.
- Align with your financial goals: Choose investments that match your risk tolerance, time horizon, and retirement objectives.
- Place your buy orders: Once you've decided, place your investment orders through your Vanguard online account or by calling them.
Congratulations! You've successfully transferred your IRA from Edward Jones to Vanguard. This move can potentially save you thousands of dollars in fees over your investing lifetime and give you greater control over your retirement savings.
10 Related FAQ Questions
How to choose between a Traditional and Roth IRA for a transfer?
You must transfer a Traditional IRA to a Traditional IRA (or Rollover IRA) and a Roth IRA to a Roth IRA to avoid tax implications. You cannot directly transfer a Traditional to a Roth without it being considered a conversion, which is a taxable event.
How to find my Edward Jones IRA account number?
Your Edward Jones IRA account number can be found on your monthly or quarterly statements, or you can contact your Edward Jones financial advisor.
How to avoid fees when transferring an IRA?
While Edward Jones may charge a transfer-out fee, Vanguard generally does not charge incoming transfer fees. Some Edward Jones fees might be unavoidable, but ensuring a direct, full transfer can minimize complications. Check with Edward Jones directly about their specific fees.
How long does an IRA transfer typically take?
A direct IRA transfer from Edward Jones to Vanguard generally takes 5 to 10 business days from the time Vanguard initiates the request, assuming all paperwork is in good order.
How to handle investments that Edward Jones has but Vanguard doesn't?
If you request an "in-kind" transfer and Vanguard does not support a particular security held at Edward Jones (especially proprietary Edward Jones mutual funds), those specific holdings will typically be liquidated to cash by Edward Jones before being transferred to Vanguard.
How to ensure a tax-free IRA transfer?
To ensure a tax-free transfer, always opt for a direct trustee-to-trustee transfer (initiated by Vanguard). Do not have the funds distributed to you personally, as this would be considered an indirect rollover and would have a 60-day deadline to redeposit the funds to avoid taxes and penalties.
How to track the progress of my IRA transfer?
Once you submit the Transfer of Assets (TOA) form to Vanguard, you can typically track the progress of your transfer through your Vanguard online account. You can also call Vanguard's client services for updates.
How to invest my transferred funds at Vanguard?
Once your funds arrive at Vanguard (likely in a money market settlement fund), you'll need to actively choose and purchase your desired investments, such as Vanguard's low-cost index funds, ETFs, or mutual funds, through their online platform or by phone.
How to contact Vanguard's transfer department?
You can typically find Vanguard's contact information, including numbers for their transfer or rollover department, on their official website (investor.vanguard.com) under their "Contact Us" or "Help" sections.
How to confirm my Edward Jones IRA is fully closed after the transfer?
After the transfer is complete and you've verified the funds are in your Vanguard account, you may receive a final statement from Edward Jones indicating a zero balance or account closure. If you don't, it's wise to contact Edward Jones directly to confirm the account has been fully closed.
