How to Combine IRA Accounts

Maybe it seemed like a good idea at the time, opening IRAs at a number of institutions. Perhaps one bank boasted attractive investment options while another featured an easy-to-use online interface. At some point, however, it might be a good idea to combine or consolidate your IRA accounts. As you approach retirement, for example, putting all your IRA funds into less risky vehicles at a single institution might be good strategy. To combine your accounts, you can either do a direct transfer or a rollover.

Direct Transfer

Tell the trustee of one IRA you want to make a direct transfer to another IRA. A direct transfer is also known as a trustee-to-trustee transfer.

Fill out any forms and pay any fees that might be required to close the account. Account closing forms are usually brief and straightforward. Fees may be fixed or a percentage of the IRA balance.

Fill out transfer paperwork for the institution you are transfering the IRA to, if required.

Check to be sure the transaction has been completed. It can take three to five business days to complete the transfer. If you find that it has not been processed, contact the originating trustee for an explanation.

Rollover

Obtain account closing paperwork from the originating IRA. Typically, you can download the documents, pick them up from the bank or brokerage, or ask to have them mailed. Fill out the form, sign and date it. Submit the form to the trustee.

Ask the trustee to cut a check for the balance. You can pick up the check or have it mailed to your address.

Deposit the check in the receiving IRA within 60 days of obtaining it. If you wait longer than 60 days, the funds might be subject to tax and/or penalty.

Report the rollover in the "Income" section of Internal Revenue Service Form 1040. If you are moving the funds from a traditional IRA to a Roth, the amount is taxable.