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Consolidating ROTH IRA help

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  • Consolidating ROTH IRA help

    I initially invested with a mutual fund advisor for my ROTH IRA in residency with only $2000 two years ago.  Since that time I became a WCI follower, wised up to high fees and switched to Vanguard and have $11000 in my new ROTH IRA.  I wanted to consolidate everything from the old advisor ROTH IRA to my new Vanguard ROTH IRA. I attempted to do this electronically via Vanguard but they said that for some reason the way the mutual fund is set up I have to fill out quite a bit of paperwork, which means contacting my old financial advisor.

    I contacted my old financial advisor (who does not give WCI style advice).  He said, why are you trying to do an "in kind" transfer vs "liquidation and reinvestment". So is it better to do an "in kind" transfer or "liquidation and reinvestment".  I know I am still a novice at this so I appreciate any advice.

  • #2
    I think an "in kind" transfer is better in the situation of a taxable account.  You don't want to incur any taxes so you have them take your mutual fund/stock "as is" and place it in the new account.

    In the ROTH IRA you can sell off everything and when the account gets moved to Vanguard you can re-invest the money into whatever you want without having to worry about taxes.  The hassle for you is re-selecting investments but it probably produces less work for the advisor guess it is a tactic and not really a hassle...  The less work they have to do, the less likely something gets messed up.

    I would probably "liquidate and reinvest" just to make the process go smoother and you are moving to Vanguard so you may already be looking to switch to better funds once you are there.

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    • #3


      I contacted my old financial advisor (who does not give WCI style advice).  He said, why are you trying to do an “in kind” transfer vs “liquidation and reinvestment”. So is it better to do an “in kind” transfer or “liquidation and reinvestment”.  I know I am still a novice at this so I appreciate any advice.
      Click to expand...


      There is no reason not to do an "in-kind" transfer if you are happy with your investment portfolio. In-kind just means they transfer the actual investments instead of selling them and repurchasing at the new custodian. I think it was tacky of the old advisor to make you feel stupid (yes, this is what it sounds like to me). When we do an in-kind transfer, we only check a box and it is quite simple.

       
      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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      • #4
        The vanguard people will help you do this over the phone.  I moved money from Merrill Lynch to Vanguard a couple of years ago and it was simple.  I moved a taxable account and 2 IRAs.  Nothing was sold just transferred.

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