IRA: Liquidate or In-Kind Transfer - Merrill Lynch to Vanguard

[Out_the_Door]

As the title says, I am in the process of positioning my accounts in anticipation of leaving the work force in 2020. I have a small IRA (Merrill Lynch) that is invested in seven funds. My ultimate goal is to liquidate all my current holdings and buy several Vanguard (or Fidelity) funds within an IRA.

I called Vanguard to get an idea of the fees involved in liquidating my funds after if I do an in-kind transfer and I just got a sales pitch for their services and a promise to call me back for a follow-up after I told them that as much as I enjoy this conversation I actually have to get back to work.

My next step is to call Merrill Lynch and find out what their fees are for liquidating the shares and placing the funds in an IRA money market fund and then initiate the in-kind transfer.

For the people who have done transfers of IRAs between companies; is it simpler to do in-kind transfers or liquidating funds prior to transfers? And for the people who have Vanguard IRA accounts will I have to jump through hoops to sell the funds if I do an in-kind transfer?

Thanks

[GrayHare]

So, you want to liquidate and transfer, or transfer then liquidate. Roughly same amount of effort. I'd do the liquidation where the commission costs less.

[steelyman]

I moved funds from a Fidelity Roth IRA to a Vanguard Roth IRA. It took a little while and Fidelity charged me $50. This was in 2018 so fees may be different now but in any case I just wanted to consolidate.

No in-kind, the source funds were sold and cash went to Vanguard.

[Sunset]

Quite a few large brokerages are now offering free trades.
Plus this time of year many offer bonuses for transferring to their company.

For example: https://www.tdameritrade.com/home.page

scroll down the page a bit and you will see they have 0 commission on stocks,etf trading.

Scroll down to the bottom and it tells you have to get the various amounts of rewards for transferring your IRA to them.

I have moved IN-KIND many accounts and only rarely needed to sell something because it was not supported by the receiving brokerage.

[jazz4cash]

I don’t see any advantage to an in-kind transfer unless it is cheaper to transfer first and then liquidate, somehow. You called both places....what did they tell you? I transferred au bond (taxable account) in-kind from a local broker to Fido and Fido reimbursed the fee charged by the local broker.

[gwraigty]

Quote:

Originally Posted by Out_the_Door For the people who have done transfers of IRAs between companies; is it simpler to do in-kind transfers or liquidating funds prior to transfers? And for the people who have Vanguard IRA accounts will I have to jump through hoops to sell the funds if I do an in-kind transfer? Thanks

We did an in-kind transfer of 2 Roth IRAs and a brokerage account from TD Ameritrade to Fidelity many years ago. We didn't sell any securities afterwards. If you want to liquidate, I agree with doing it where the costs would be cheaper.

[Out_the_Door]

Quote:

Originally Posted by jazz4cash You called both places....what did they tell you?

Vanguard ignored my question and tried to sell me on their service and I have a call in to Merrill Lynch today, hopefully they will be more transparent than Fidelity was.

[Qs Laptop]

In-kind transfers are quicker and easier. They're easier because the place that is receiving the money will do most of the work. You tell them what you want transferred, sign an authorization, and sit back and watch. Otherwise you need to initiate the sales, track progress, and wait for the transactions to settle. Then start the transferring process. And listen to your current brokerage house ask questions about your intents. In-kind transfers go much faster.

If there are any fees imposed from the brokerage house you are leaving ask the receiving brokerage house to reimburse you. Fidelity did this for me.

There should be no fees for liquidating funds after an in-kind transfer at Fidelity because they've joined the $0 trade bandwagon.

Specifically what question did Fidelity ignore?

[Out_the_Door]

Quote:

Originally Posted by Qs Laptop Specifically what question did Fidelity ignore?

I meant to say Vanguard. I just got off the phone with Fidelity and they just told me almost the exact same info as you.

[jazz4cash]

When I did my in-kind xfer to Fido I gave them the name and account number where the bonds were held and the Fido rep filled out all the forms. I signed and delivered them to the local Fido office or I could’ve used fax or USPS. The xfer fee was a surprise and I guess Fido paid it on my behalf and credited it back when I called to inquire. It was not a big transfer.

[HI Bill]

To make this simpler, since it's a small account, and an IRA, at ML, I'd just transfer all of the funds into one money market account (since it's in an IRA, there will be no tax liability, as long as you don't withdraw the funds from the IRA).

Then create a rollover IRA at VG, and have them transfer the funds. In my past experiences, there were no fees involved in the rollover. You can allocate (tell Vanguard) which funds you want to invest in, or can put them in the money market account within the rollover IRA, then do the purchases yourself online.

[target2019]

Quote:

Originally Posted by HNL Bill To make this simpler, since it's a small account, and an IRA, at ML, I'd just transfer all of the funds into one money market account (since it's in an IRA, there will be no tax liability, as long as you don't withdraw the funds from the IRA). Then create a rollover IRA at VG, and have them transfer the funds. In my past experiences, there were no fees involved in the rollover. You can allocate (tell Vanguard) which funds you want to invest in, or can put them in the money market account within the rollover IRA, then do the purchases yourself online.

+1
Liquidate the ML funds to money market.
If by some chance they are Vanguard funds, then transfer in-kind.