Moving Retirement Accounts

[anders2010]

Hey, a question. So I have two retirement accounts with Fidelity. One is a Roth IRA thats not invested in anything and the other is a SEP invested in a bunch of mutual funds.

I want to do two things, first I want to sell the funds within the SEP without withdrawing from it (is that possible?), second I want to move both of these accounts over to Vanguard because I like their index fund selection a lot better. But at the same time I'd like both accounts to just sit, uninvested for now. Is this possible to do if I move it to Vanguard or do I have to wait till I want to invest again before I can move it?

Also I should mention at some point I plan on withdrawing early from both these accounts as my plans have changed since I started with them (I know I'll get hit with some penalties) but I don't know if there's ever a better time to do that...

 

[Coach]

anders, do you mean your Roth has a zero balance, or that it's all in cash or money funds at the moment?

As for your SEP, I would think you could sell the funds as long as you leave the proceeds in the SEP account.

Give Vanguard a call -- I'm sure they will be delighted to answer any questions you have about moving your accounts to them.

Coach

 

[walkinwood]

I think you can do both things immediately, but as Coach suggested, call Vanguard. They'll help you with paperwork and do the transfer for you.

- You can sell your SEP-IRA funds & move the money to a money market fund in the same account
- you can move both your accounts IRA & SEP-IRA to vanguard. When you move the funds, choose to have them in a MMF at vanguard.
You don't need to tell them of your future plans.

 

[ziggy29]

You should have no trouble transferring these accounts to Vanguard as far as I can tell as long as its a direct custodian to custodial transfer and no money is ever deposited in your accounts and no check is written out in your name.

I'm sure Vanguard would be happy to walk you through the process.

 

[anders2010]

Thanks guys, didn't know it was that simple

 

[Koolau]

If you transfer 100K or more, you can be assigned someone at Vanguard to do some "hand holding" if you desire. I've done this before and it was a good idea for the first time through the process. That way, as you complete the process, you get to talk to the same person who, in theory, knows what it is you wish to accomplish with all of the gyrations you are going though.

You mentioned "penalties". Are you talking about fund penalties or the befor 59 1/2 penalty? If you've done your homework and have decided that the 1% or so that some funds may charge you for early withdrawal are worth it, I suppose that's not so bad. If you are in the pre 59 1/2 situation, you might seek tax advice to figure your way around that (e.g., 72(t) withdrawals). In any case, don't take penalties lightly. Do some math and get some help to minimize the effects. Just my $.02 worth and Hey! YMMV