Fidelity IRA Transfer Question

[RetiredAndLovingIt]

I want to transfer some IRA MM funds to one of my Credit Unions. Does anyone know how quickly Fidelity mails the check once they have the paperwork and will they overnight it for a fee?

 

[Spock]

Have the CU pull the funds directly from Fidelity.

 

[imjustawarrior]

Have the CU pull the funds directly from Fidelity.

I thought pushing was faster, but maybe I have it backwards.

 

[RetiredHappy]

Just set up for the accounts to be linked. Initiate the transfers online. My BOA and Fidelity transfers show up on the same day. Yes, via "push".

 

[Spock]

I thought pushing was faster, but maybe I have it backwards.

I find it slower.
The receiver is motivated to get the new funds... the sender is not excited to lose the business... so the pull process has higher motivation levels the the pusher.
Pull is also a lot simpler if transferring a portfolio vs. cash.
I've written too much communication software... it's just more straight forward to have the receiver pull... other wise "stuff" shows up unexpectedly at receiver and they have to go back and figure out where it's supposed to go vs. if the receiver initiates the transaction.

 

[Spock]

Just set up for the accounts to be linked. Initiate the transfers online. My BOA and Fidelity transfers show up on the same day. Yes, via "push".

That works for cash... but I don't think you can link retirement accounts between custodians. Maybe you can.

 

[Qs Laptop]

I want to transfer some IRA MM funds to one of my Credit Unions. Does anyone know how quickly Fidelity mails the check once they have the paperwork and will they overnight it for a fee?

I bet they will overnight it for a fee. I would call Fidelity and ask them. Their customer service is really good.

But I agree with Spock. Have your credit union pull the amount out of your Fidelity account.

 

[Al18]

Does your credit union pay a higher MM rate than Fidelity 4.97%?

 

[RetiredHappy]

That works for cash... but I don't think you can link retirement accounts between custodians. Maybe you can.

Yeah, we are talking about cash here. But if you want to transfer an account from one brokerage to another, you want to get the receiving brokerage to send the request over to "pull".

 

[RetiredHappy]

I bet they will overnight it for a fee. I would call Fidelity and ask them. Their customer service is really good.

But I agree with Spock. Have your credit union pull the amount out of your Fidelity account.

Same day transfer at Fidelity is free for us. I do it all the time with Fidelity.

 

[RetiredAndLovingIt]

I should have made it clear this would be a Trustee to Trustee Transfer so paperwork involved and it usually takes a couple of weeks to move IRA funds between Trustees. I could use the 60 day rule but would rather not do anything that would trigger a tax form.

 

[RetiredAndLovingIt]

Does your credit union pay a higher MM rate than Fidelity 4.97%?

No but yes in a CD

 

[RetiredHappy]

I should have made it clear this would be a Trustee to Trustee Transfer so paperwork involved and it usually takes a couple of weeks to move IRA funds between Trustees. I could use the 60 day rule but would rather not do anything that would trigger a tax form.

What do you mean by Trustee to Trustee transfer? Our accounts are held in our revocable trust.

 

[RetiredAndLovingIt]

Direct Transfer: What it is, How it Works, Types

A direct transfer is a transfer of assets from one type of tax-deferred retirement plan or account to another.

www.investopedia.com

 

[imjustawarrior]

I find it slower.
The receiver is motivated to get the new funds... the sender is not excited to lose the business... so the pull process has higher motivation levels the the pusher.
Pull is also a lot simpler if transferring a portfolio vs. cash.
I've written too much communication software... it's just more straight forward to have the receiver pull... other wise "stuff" shows up unexpectedly at receiver and they have to go back and figure out where it's supposed to go vs. if the receiver initiates the transaction.

I think there are more variable than I originally thought. This article covers some of them.

Finance Buff on ACH Push vs Pull

 

[RetiredAndLovingIt]

That works for cash... but I don't think you can link retirement accounts between custodians. Maybe you can.

Exactly, I don't want to trigger any 1099-R.

 

[Gotadimple]

Call your credit union. They should have you on the phone and initiate a call to Fidelity where you all discuss what needs to happen with this Trustee-to-Trustee transfer. Be sure to ask Fidelity how long it will take to make the funds ready, AND, if they can do an ACH transfer instead of sending a paper check.

 

[jazz4cash]

I have done several with Fidelity. I generally start with the receiving institution but I don’t think it matters with Fidelity. My credit unions are not consistent, though. Fidelity IRA to BofA taxable account is one day for me. If you submit a transfer request at Fidelity it will give an estimate for time to completion before you submit.

 

[SecondCor521]

Exactly, I don't want to trigger any 1099-R.

I'm pretty sure that you'll get a 1099-R if you do a direct rollover. Easy to handle and report, but you'll still get one (and still need to report it on your return).

 

[RetiredAndLovingIt]

I'm pretty sure that you'll get a 1099-R if you do a direct rollover. Easy to handle and report, but you'll still get one (and still need to report it on your return).

It's not a direct rollover, it's just a direct transfer from one custodian (trustee) to another. The only time I ever got a 1099 was when I rolled over my pension and profit sharing plans into an IRA. I think I found my answer at the Finance Buff.

IRA Partial Transfer from Broker to Credit Union for CDs

Transferring part of an IRA from a broker to a credit union for a CD is easier than you think. My transfer completed in a little over a week.

thefinancebuff.com

 

[SecondCor521]

It's not a direct rollover, it's just a direct transfer from one custodian (trustee) to another.

Again, I'm pretty sure those are the same thing. The IRS uses the term "rollover" for most types of transfers; regular humans tend to use the term "transfer" for transfers.

The fact that you might be doing only a partial transfer/rollover (as in the article) doesn't really matter as far as the tax form goes.

You'll find out in January one way or the other.

 

[RetiredAndLovingIt]

I have done several with Fidelity. I generally start with the receiving institution but I don’t think it matters with Fidelity. My credit unions are not consistent, though. Fidelity IRA to BofA taxable account is one day for me. If you submit a transfer request at Fidelity it will give an estimate for time to completion before you submit.

That''s fine if it's a normal withdrawal but if your plan is to put it back into your IRA you only have 60 days and can only do this once per year. I think I saw another post from you recently where you mentioned that you had received a 1099-R and had to call your credit union and get it sorted and they should have understood what you were doing. Transferring an IRA withdrawal into your Taxable account is what caused the 1099-R and that's what I'm trying to avoid and at the same time speed up the process. I'll start the process at the credit union tomorrow and see if they can get me on the phone with Fidelity on a call to see if we can speed this up.

 

[jazz4cash]

That''s fine if it's a normal withdrawal but if your plan is to put it back into your IRA you only have 60 days and can only do this once per year. I think I saw another post from you recently where you mentioned that you had received a 1099-R and had to call your credit union and get it sorted and they should have understood what you were doing. Transferring an IRA withdrawal into your Taxable account is what caused the 1099-R and that's what I'm trying to avoid and at the same time speed up the process. I'll start the process at the credit union tomorrow and see if they can get me on the phone with Fidelity on a call to see if we can speed this up.

I think I agree with all that but you’ve mentioned some unrelated items. Going directly between IRAs isn’t a trigger for the 60 day rollover rule. A lot of confusion is caused by inconsistent terminology wrt the rollover vs transfer among IRS and various financial institutions.

Edit: I was really only speaking to the timing of funds leaving Fidelity IRA in my previous post.

 

[Spock]

I should have made it clear this would be a Trustee to Trustee Transfer so paperwork involved and it usually takes a couple of weeks to move IRA funds between Trustees. I could use the 60 day rule but would rather not do anything that would trigger a tax form.

My experience moving IRAs between brokers has been it happens very quickly... less than a week. I expect the only delay in your case would be on the credit union side.

IMO trustee-to-trustee IRA transfers are the only way to go. I once moved an IRA between banks that shared a parking lot... I hand carried the check across the parking lot and the transfer was completed in less than an hour. HOWEVER... a couple of years later I got a very vague audit letter from the IRS and it took 8 months of the IRS threatening to seize my accounts to straighten out that the transfer was within the 60 day rule.