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Funding Your Self-Directed IRA with a Transfer

Published on March 8, 2016

Once you open your self-directed retirement account, you have to fund it, which you can accomplish by a transfer. A transfer is when you move funds between like accounts, such as from one Traditional IRA to another Traditional IRA. A transfer differs from a rollover because it is initiated only by a financial institution and not the account holder (you can learn more about transfers and rollovers in our informative video on this topic). In addition, unlike rollovers, transfers are not taxable events and therefore, are not reported to the IRS.

At Next Generation Trust Services, we make it easy to initiate a transfer in order to fund your Next Generation IRA; we simply require the transfer form (found on our site under Client Forms and provided with the application) and a current account statement (from which funds will be transferred). We ask for the statement in order to confirm the details of the transfer: that the account type is the same type as the account that it is being transferred into, and that the requested transfer amount is available to transfer.

Regarding your transfer options:

  • It can be a complete or partial transfer of stocks, bonds or mutual funds and/or an asset in kind.
  • For stocks, bonds or mutual funds, they must be liquidated prior to the transfer.
  • Since we are not a broker dealer, we can only accept non-publicly traded assets.
  • Transfers of assets in kind will require additional registration documentation depending on the asset type. Our staff will walk you through that process if necessary.

Upon receipt of the transfer form and statement, our office signs the form as the administrator for the accepting custodian and initiates the transfer accordingly. Our office then contacts the current custodian (where the funds are coming from) and provides funding instructions. On occasion, many proactive clients mail our form directly to the current custodian. Unfortunately, this often causes delays since our office must initiate the transfer; otherwise it could be considered a rollover, which is a reportable event and may be taxable.

Helpful tips about fund transfers for your self-directed retirement plan

Since self-directed investors are responsible for researching their investments as well as all necessary instructions for the administrator (like Next Generation), here are some helpful tips regarding fund transfers. They’re good to know in general and will help you avoid delays in funding your self-directed retirement account at Next Generation Trust Services.

  • Our form reserves a space for a Medallion Guarantee Stamp, which is sometimes required by your current custodian. Please determine whether this is required. If it is required, the client must sign the form in the presence of an authorized signatory at a financial institution and mail the original form to our office. Our office does not do Medallion Guarantees.
  • Many custodians do not require original documents and even accept requests by fax. Please determine whether originals are required and confirm a fax number where we can send the form.
  • Often, the contact information we receive is for a specific branch or office of the custodian and not the transfer processor. If mailing the transfer request is selected, please confirm we have the correct mailing instruction.
  • Recently, a few custodians have discontinued the practice of wiring funds. If time is a factor, please discuss expedited options (for example, express delivery of a bank check) with your current custodian.

We do our best to coordinate fund or asset transfers with current custodians in the most expeditious manner. Never hesitate to call our office with your questions or to discuss your transaction; we can be reached at (888) 857-8058 or Info@NextGenerationTrust.com.

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