Stupid question about rolling over an IRA

[RhodyGreg14]

I was automatically contributing to my Roth IRA last year, but after my wedding I stopped and used that money to pay off my credit cards. I also switched banks in the meantime. When I called Gabelli to re-start my monthly ACH they told me that I needed a "medallion signature guarantee" from my bank. Does that sound right? It seems like a pain in the ass hoop to jump through just to set up automatic payments. I think it might be better to just roll over my IRA from them to a Vanguard one. How do I go about doing that? Also, if I want to invest in two funds at Vanguard is that two IRAs or is it all under my Roth IRA account? Any help would be appreciated!

 

[W2R]

I was automatically contributing to my Roth IRA last year, but after my wedding I stopped and used that money to pay off my credit cards. I also switched banks in the meantime. When I called Gabelli to re-start my monthly ACH they told me that I needed a "medallion signature guarantee" from my bank. Does that sound right? It seems like a pain in the ass hoop to jump through just to set up automatic payments. I think it might be better to just roll over my IRA from them to a Vanguard one. How do I go about doing that? Also, if I want to invest in two funds at Vanguard is that two IRAs or is it all under my Roth IRA account? Any help would be appreciated!

I have one Roth IRA at Vanguard, and I have it in two funds. There is no limitation that I know of regarding that. You can also switch your balance from fund to fund within your Roth.

To roll over your IRA, I'd suggest calling Vanguard to ask them exactly what they need for you to do, and what info they need. They have been extremely helpful to me with questions of that nature. Then, you can go to your bank and find out what they need, and make sure everything is done properly. I believe you can set up automatic ACH transfers into your Roth online, once you are able to log into your Vanguard account.

 

[JohnDoe]

I don't think rollover is the term you want. I think you want to do a transfer and if Vanguard has available the funds that you currently own, you want to to an in-kind transfer.

This should be able to be handled directly with Vanguard.

 

[RhodyGreg14]

I don't think rollover is the term you want. I think you want to do a transfer and if Vanguard has available the funds that you currently own, you want to to an in-kind transfer.

This should be able to be handled directly with Vanguard.

What if I want to take the money I have in my Gabelli IRA (small cap growth) and put it in a Vanguard (say target retirement 2045)? Is that a rollover or is that going to be taxable distribution?

 

[REWahoo]

"The shifting of funds from one IRA trustee/custodian directly to another trustee/custodian is called a transfer. It is not considered a rollover because nothing was paid over to you. You can have as many transfers as you like each year; transfers are tax-free, and there are no waiting periods between transfers. They don't have to be reported on your tax return."

IRA Transfers and Rollovers

 

[JohnDoe]

No. You would sell the small cap growth fund so your Roth IRA would be sitting in a cash position. Then start the transfer with Vanguard. When the account comes over, then you could buy whatever funds Vanguard offers.

You might want to look at the account fees at Vanguard for "small" Roth IRA accounts. Not sure if there is a annual fee for accounts under a certain amount.

 

[Achiever51]

When I called Gabelli to re-start my monthly ACH they told me that I needed a "medallion signature guarantee" from my bank. Does that sound right? It seems like a pain in the ass hoop to jump through just to set up automatic payments.

Last year I rolled over my 401(k) from MegaCorp to Vanguard with one phone call. But when I wanted to roll over a small IRA from my local bank to Vanguard, I too had to get the dreaded "medallion signature guarantee" from the bank. Basically it's like getting a signature notarized...you take the paperwork to the bank and sign it in front of the person who is authorized to affix the medallion to the paperwork, then send it in.

 

[donheff]

You can roll that IRA over to Vanguard and allocate it to as many funds as you would like. Ironically, however, you might need a medallion signature on the transfer papers for VG to pull the money from your current holder. You shouldn't need any such proof to set up automatic funding after that.

 

[RhodyGreg14]

Thanks for the tips everyone.