Rollovers to Your Self-Directed IRA: A Step-By-Step Guide

You’re looking to move your money into a self-directed IRA, so you can invest however you’d like— excellent! But… how exactly do you move your money from your old 401(k) or IRA? Whether you have your funds in a 401(k) or have taken a distribution you need to roll back into an account, we can help. Unsure of how to do this? We’d love to walk you through the process!

What’s a Rollover?

There are two basic types of rollovers, as defined by the IRS.

• A direct rollover, also known as a trustee-to-trustee rollover, is where the funds are moved from a qualified retirement plan that is not an IRA, like a 401(k) plan, into a Traditional IRA. These funds are rolled directly from one trustee to another. This is a lot like an IRA transfer but with a few differences— most importantly, this movement of funds is reported to the IRS. But do not fear! — though reported to the IRS, you won’t owe any taxes on these funds since you are rolling them back into a retirement account. Do note that taxes typically withheld during a 401(k) transfer are not withheld during a direct rollover.
• An indirect rollover, also known as a 60-day rollover, is when you personally take possession of the funds before rolling them back into a retirement account within 60 days (hence the name). For example, you’d take a distribution and deposit those funds into a personal bank account. Before the 60-day deadline is up, you’d write a check and deposit the funds into a new retirement account. Remember: to prevent being taxed on these funds, you must roll them back into a retirement account within that deadline. It’s important to note that with an indirect rollover, the IRS only allows one in a 12-month period for all your retirement accounts. If you’ve already rolled over funds within that 12-month period, unfortunately you’ll have to wait (or choose a different method), regardless of which account is rolling over the funds.

No matter the type of rollover, you’ll receive a 1099R from your old provider and a 5498 from IRA Resources, to show the funds left and returned to a retirement account. If you have any additional questions, please let us know— we’d be happy to discuss the options available to you in greater detail.

Step-By-Step: Rollover Your IRA or Qualified Plan

The process for a rollover with IRA Resources is the same whether you’re completing a direct or indirect rollover. Most importantly, you’ll need an account with us. We need a completed Online Application and a copy of your ID, once submitted the process is quick and easy. Once open, to start the rollover we need:

• A Rollover Form
• A copy of your most recent account statement from your previous custodian

At IRAR there is a $30 fee to accept funds via wire, otherwise there is no charge for processing a rollover. If submitted via check there is no charge, but there is a 5-business day hold before the money can be invested. If doing an indirect (or 60-day) rollover, you’ll need to get those funds to us within the 60-day window— or else your funds are not eligible to be rolled over and are considered a distribution, meaning you’ll owe the IRS taxes on the amount withdrawn.

After you’ve submitted your paperwork to IRA Resources, you’ll need to contact your current plan custodian to start the movement of funds. You will need to do this— IRA Resources is not able to start the movement of funds from your account at another institution. You are also responsible for following up with your custodian regarding their processing time and any additional requirements they may have. This is not something IRA Resources can do for you. If you need any additional information on how to send funds to us or how to go about this process, please reach out and we’d be happy to assist.

All-Cash Rollovers

If you currently hold assets in your account but want to rollover cash, you will need to liquidate those assets with your previous custodian before submitting the request. This applies to Brokerage IRAs as well, which also must be liquidated. Otherwise, once notifying your current custodian— you’re done! When the funds arrive, it’s time to invest.

In-Kind Rollovers

If you want to rollover the assets in-kind, there is a little bit more that must be done. Like with a transfer, the assets will need to be put into the name of the new IRA (“IRA Resources FBO: client name IRA”) before they can be officially booked into the account.

Real estate and similar assets will need to be recorded in the new account name before they can be booked into your IRA Resources account.  For real estate, remember that you will need to arrange to have a Quit Claim Deed filed with the County Recorder’s Office in located in the county where the property is held. 

If you have any other questions about your assets or the process involved in moving them to IRA Resources, please feel free to ask one of our qualified representatives— we’d be happy to help.

Now you’re basically a rollover expert! The process is simple, if you understand what is required at every step of the way. We aim to make this process easy and assist in any way possible. If you have any other questions about these rules, we want to help! Please reach out to an IRAR Representative and we’d be glad to hear from you. Happy investing!