Does a Roth custodian change effect a Roth’s age?
I have a Roth that was originally opened over 10 years ago and I am interested in changing the custodian. If I were to transfer the entire balance via custodian to custodian transfer and close the original account would the original open date travel with the funds or would it be best to leave a small balance in the old account (like $100) to keep the age of the account?
Permalink Submitted by mk foss on Fri, 2013-02-15 19:13
You do not need to leave the old account open. All Roth IRAs are treated as one for this purpose so the historical record is enough to prove that the 5 year limit has been met.
Permalink Submitted by Alan - IRA critic on Fri, 2013-02-15 19:14
The aging automatically transfers, so you don’t need to keep the first account open. The IRS knows the first year you contributed because they receive Form 5498 from the custodian for each contribution you made. You also receive these forms and you should retain them.