How to Transfer a Roth IRA to Another Broker: 5-Year Rule

To transfer a Roth IRA to another broker without taxes or penalties, open a Roth IRA at the new firm and ask that broker to pull the assets through a direct trustee-to-trustee transfer. The new broker handles the paperwork through the ACATS network, the money never passes through your hands, and the whole thing usually settles in three to four business days.¹ Your five-year holding period travels with you, and the IRS does not limit how many direct transfers you can do in a year.²

Choose a Direct Transfer, Not a 60-Day Rollover

The single most important decision comes before you fill out any form: how the money moves. A direct trustee-to-trustee transfer sends your balance from the old broker to the new one behind the scenes. The IRS does not treat these as rollovers, so there is no annual cap and no risk of accidentally triggering taxes.² No 1099-R or 5498 is generated for a direct Roth-to-Roth transfer, and you have nothing extra to report on your return.³

The alternative is a 60-day indirect rollover, where the old broker sends a check or ACH deposit to you and you have 60 calendar days to redeposit the full amount into a new Roth IRA.⁴ Miss the deadline and the whole distribution becomes taxable. If you are under 59½, a 10% additional tax also applies to the taxable portion.⁵ The IRS also caps indirect rollovers at one per 12-month period across all your IRAs combined.² A second one within that window can be treated as an excess contribution and taxed at 6% for every year the money stays in the account.⁶

For a routine broker-to-broker move, there is no good reason to touch the money yourself. Pick the direct transfer.

Decide Whether to Move Investments In-Kind or as Cash

Before you file anything, decide whether to move your positions as they are or sell them first. An in-kind transfer moves your stocks, bonds, and ETFs directly to the new broker without a sale. You stay invested, avoid realizing gains or losses, and skip the guesswork of repurchasing at different prices.

Not everything can make the trip in-kind. Proprietary mutual funds are the common sticking point: if your old broker offers a house-brand fund the new one does not support, those shares have to be sold before the transfer. Check the new broker’s fund availability first so you know which positions will need to be liquidated. If only a holding or two need selling, a partial in-kind transfer handles the rest and the cash from the sold positions can follow separately.

Fractional shares cannot move through ACATS. If you own 10.37 shares, the 10 whole shares transfer and the 0.37 gets sold at market value, with the cash proceeds arriving a few days after the whole shares land.

Open the New Account and Match the Titling

Open the Roth IRA at the new broker first. The receiving account must exist and be titled identically to the old one: same account holder, same registration type. Even a missing middle initial or suffix can cause the transfer to bounce. Both accounts must be registered as Roth IRAs.

Fill Out the Transfer of Assets Form

The paperwork that drives the move is a Transfer of Assets (TOA) form, which feeds into the Automated Customer Account Transfer Service (ACATS). Most brokers keep the form in their online portal under account services or funding. You will need:

Your old account number, which appears on any recent statement from the delivering broker.
The delivering broker’s clearing number, a four-digit code assigned by the National Securities Clearing Corporation. If it is not on the statement, the old broker’s customer service line can give it to you.
A full or partial designation. A full transfer moves everything and usually closes the old account. A partial transfer lets you name specific securities by ticker or a dollar amount.

For a partial in-kind transfer, list each ticker and the exact number of whole shares. Vague instructions cause delays. For a full transfer, make sure no automatic contributions or dividend reinvestments are scheduled to settle during the transfer window, since pending activity can stall the process.

Many delivering brokers charge an account transfer or closure fee, commonly $50 to $150. Ask the new broker whether they will reimburse it. Several major firms cover transfer fees above a certain balance and credit the reimbursement automatically once the transfer settles.

What Happens After You Submit

Once you sign and submit the TOA, the receiving broker takes over. They review the paperwork, then transmit a transfer request to the delivering broker through ACATS. Most brokers accept digital signatures, so scanning is usually not needed.

Under FINRA Rule 11870, the delivering broker must validate or reject the request within a set number of business days after receiving it.⁷ If they take exception, the new broker will tell you what needs fixing. Rejections usually come from name mismatches, missing signatures, or unsettled trades.

Once the request is validated, the assets move quickly. As of late 2025, the DTCC shortened the ACATS settlement cycle by a day, bringing a standard full transfer to roughly three to four business days end to end.¹ The old account is typically frozen during this window to prevent trades that would create discrepancies with the transfer documentation.

Cash and securities sometimes arrive on different dates, and that is normal. The new broker will usually notify you automatically once each piece lands. Residual credits like dividends or interest paid after the move trickle in over the following weeks, and most brokers sweep them to the new account without any additional paperwork.

When You Might Need a Medallion Signature Guarantee

Some transfers require a Medallion Signature Guarantee, a certification stamp verifying your identity and authority. Whether you need one depends on the brokers involved and the nature of the transfer. Changes in account registration, transfers to accounts with different titling, and transfers following the death of an account holder commonly trigger it.² Some firms also require one for high-value transfers, with the dollar threshold varying by institution.

To get the stamp, visit a bank or credit union branch in person with government-issued ID and your account statements. The institution providing the guarantee assumes liability if the signature turns out to be fraudulent, which is why digital copies are almost never accepted. Mail the original stamped document by certified mail and keep a photocopy. If your broker tells you a Medallion is needed, add a few days to your timeline before the electronic transfer can begin.

Your Five-Year Clock Does Not Reset

This is what keeps a lot of people from pulling the trigger, so it is worth being direct: moving your Roth IRA from one custodian to another does not restart the five-year holding period required for tax-free earnings withdrawals.

The IRS measures the five-year period from January 1 of the tax year you first contributed to any Roth IRA, not from the specific account you are transferring.⁸ If you opened your first Roth in 2019 and transfer the balance to a new broker in 2026, the clock still started on January 1, 2019. The holding period follows you as the account owner, not the institution.

If you have converted traditional IRA money to Roth, each conversion carries its own separate five-year period for purposes of the 10% early distribution tax on the converted amount. Transferring those assets to a new broker does not reset those individual conversion clocks either.⁸

A direct transfer also does not count as a contribution, so it does not affect your annual Roth IRA contribution limit for the year, and it does not generate tax forms for you or the IRS.³ If you receive a 1099-R after what was supposed to be a direct transfer, call both brokers, because it may mean the transaction was processed incorrectly.

Verify Cost Basis Once the Assets Land

Federal law requires brokers to pass adjusted cost basis and holding period along with covered securities when shares move between accounts. That information can take five to ten days to populate on the new broker’s platform after the shares themselves arrive.

Compare the cost basis figures on your new account against your most recent statements from the old broker. If anything looks off, contact the new broker’s support team right away. Wrong cost basis data leads to overpaying or underpaying taxes when you eventually sell, and fixing it after a sale is much harder than catching it during the transfer. Hold onto the old statements until every position matches.

A Note on Inherited Roth IRAs

If you inherited a Roth IRA from someone who was not your spouse, your options are narrower. Non-spouse beneficiaries cannot use a 60-day indirect rollover. The only permitted method is a direct trustee-to-trustee transfer into an inherited Roth IRA titled in the deceased owner’s name for your benefit.⁴ If you receive a check, the IRS treats the whole amount as a taxable distribution, and depositing it into an inherited IRA will not undo that.

Surviving spouses have more room. They can transfer the inherited Roth into their own Roth IRA and treat it as their own, or keep it as an inherited account. The choice affects required minimum distribution rules and the five-year holding period, so it is worth working through both options before starting the transfer.

1
DTCC. ACATS Transformation Is Underway
2
Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
3
Internal Revenue Service. Instructions for Forms 1099-R and 5498 (2025)
4
Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts
5
Office of the Law Revision Counsel. 26 USC 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts
6
Office of the Law Revision Counsel. 26 USC 4973 – Tax on Excess Contributions to Certain Tax-Favored Accounts and Annuities
7
FINRA.org. FINRA Rule 11870 – Customer Account Transfer Contracts
8
Internal Revenue Service. Publication 590-B (2025), Distributions from Individual Retirement Arrangements (IRAs)