E*Trade IRA Account Rollover Is Easy

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It’s the tax season. For many taxpayers, it’s not only the time to finish 201o taxes, but also the time to catch up IRA contributions because April 18th, the tax day, is also the deadline to make 2010 IRA contributions. For 2010, the annual contribution to IRA accounts, which could be either Roth or Traditional, is set at $5,000. If you haven’t maxed out the annual limit yet, which you definitely should if possible, you have until April 18th to make up whatever amount that’s left.

When it comes to where to open an IRA account, you will have plenty of options, either mutual fund companies or brokerage firms. The biggest benefits of having an IRA account with the mutual fund company that issues the fund you want to invest in is there will be no additional charge when buying or selling shares of the fund, which isn’t the case most of the time if you invest in the fund through a third party, whether it’s another fund company or broker. The biggest disadvantage of such strategy is that unless it’s a mutual fund company like Vanguard which pretty much has every fund you want in every asset class, you will end up having multiple accounts if you want to invest in funds in different asset classes and these funds are not from a single company.

That makes having an IRA account at so called fund supermarket brokers an quite obvious choice and E*Trade Financial is one of those brokers that operates a fund supermarket with thousands of funds from many mutual fund companies. If you are considering a new retirement account, whether you plan to fund the account with new contribution or by rolling over your old 401(K) account, E*Trade’s no-fee IRA account is a solid option, especially if you want to move old 401(K) account to E*Trade because the broker is currently offering up to $500 cash bonus for rollover IRA account. Depending on the amount of assets transferred to E*Trade, the amount of bonus credited will be:

  • Deposits between $25,000 and $49,999 receive $50;
  • Deposits between $50,000 and $99,999 receive $100;
  • Deposits between $100,000 and $249,999 receive $250;
  • Deposits over $250,000 receive $500.

And rolling old 401(K) account to an E*Trade IRA account is pretty easy. You can do it yourself following these three steps:

  1. Open an E*Trade IRA account with no minimum balance. This process can be done entirely online and will take only 10 to 15 minutes to complete.
  2. Contact your former 401(K) account administrator and ask for a direct rollover of your old 401(K) account with all its assets to the newly opened E*Trade IRA account. There may be some paperwork to complete, such as distribution forms, before your former 401(K) plan administrator can release the asset. In some cases, you may have to mail the forms back.
  3. Since you are making a direct rollover, make sure that the distribution check is sent to E*Trade directly, not to yourself. The mailing address of E*Trade Financial is

E*TRADE Securities LLC
PO Box 484
Jersey City, NJ 07303-0484

That’s it.

Once the rollover is completed and the check is deposited into your E*Trade IRA account, you can choose to invest in whatever investments that E*Trade has to offer, whether it’s mutual funds, stocks, or ETFs.

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