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Anyone Do (Indirect) IRA Rollovers to PenFed?
Old 12-08-2013, 08:44 AM   #1
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Anyone Do (Indirect) IRA Rollovers to PenFed?

indirect....where you get check in own name from current custodian, endorse and send to PenFed. Have done it many times w/o a problem. Recently did this again and got urgent e-mail message from PenFed to contact them ASAP.
They want proof from current custodian this these are really IRA rollover funds.....basically the custodian's name, check amount, date of withdrawal
(all of which should be on the check) and also source of funds...i.e. type of account.

I haven't kept a copy of the checks from the past (just the stubs) so I don't know if anything has changed there or if PenFed has just morphed into being the IRA cop , instead of letting the IRS check the 5498s.

Just wondering if anyone has had the same experiece. I do the indirect way since it supposedly is faster/simpler and it avoids a $30 type fee from custodian.
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Old 12-09-2013, 11:13 AM   #2
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I have not done this but one advantage to not doing that is that you can do manual transfer once per year as I recall and trustee-to-trustee transfer any number of times, so if you have say 3 CDs you want to transfer, you could use the former only once (unless you wait for all of them to mature first and combine them into 1 transaction).

Now, I don't know why Penfed would be requesting this info. As you said, it does not make sense. Wonder if calling someone else at Penfed would help resolve this. It should be between you and IRS on how to account for this and none of Penfed's business really...
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Old 12-09-2013, 06:40 PM   #3
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I'm mostly doing the indirect rollover to avoid the $30 or so fee that the current custodian charges for a direct transfer. The once-every-12mos limitation is not often a problem and if it is I just do a direct transfer to TIRA#2 at current custodian and do rollover from that account instead

Couldn't get anyone at either place to admit anything has changed so just my speculation that PenFed is doing it save us from ourselves. I've sometimes worried that I might check the wrong box when doing a rollover re: what type of account it is being sourced from so perhaps it's just a doublecheck. Imagine if you thought it was from a Roth( when it was actually a TIRA) so you didn't pay taxes when you were supposed to..........or if you thought it was from a TIRA (when it was actually from Roth)
so you paid taxes when you didn't have to.

Of course on this round I ordered 3 different terms but they made them all the same so I'm not sure who is checking who..............
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Old 12-09-2013, 09:31 PM   #4
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Yes, I did one many years ago (2008). I had the check made payable to Penfed "FBO: my name" and mailed to me. The checkstub is marked "Partial Distribution-Direct tranfer-IRA".

I did one more recently and Fidelity insisted on sending the proceeds via ACH.
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Old 12-16-2013, 02:36 PM   #5
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Quote:
Originally Posted by jazz4cash View Post
Yes, I did one many years ago (2008). I had the check made payable to Penfed "FBO: my name" and mailed to me. The checkstub is marked "Partial Distribution-Direct tranfer-IRA".

I did one more recently and Fidelity insisted on sending the proceeds via ACH.
Hope I am never accused of quoting myself....Anyway, maybe I misremembered Fidelity insisting on sending proceeds via ACH. I found another confirmation for a rollover by check to Navy Federal. I Just got off the phone with them and they are insisting that funds can only be sent by check to my address of record (with the FBO notation described above).
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