Converting a traditional IRA CD to a Roth IRA Annuity Account
I have three traditional IRA CD’s maturing at different dates this year. I want to know if I can convert the traditional IRA CD’s (as they mature) straight into a ROTH IRA flexible annuity account. Stated differently, do I need to convert the traditional IRA CD’s to ROTH IRA CD’s first, and then convert the ROTH IRA CD’s into the ROTH IRA flexible annuity account or can the traditional IRA CD’s just be directly transferred into the ROTH IRA flexible annuity account?. The CD’s are with a different bank than the annuity account, so I would need to do a direct trustee to trustee transfer. I know there are income consequences for the conversion as well. Thank you for any insight you can provide.
Mark
Permalink Submitted by Alan - IRA critic on Sun, 2014-02-09 22:53
A T to T transfer can be done directly into the Roth annuity if the current bank will offer one. You should first find out the costs and procedures with the new bank should you want to recharacterize the conversion due to the tax bill or any other reason.
Permalink Submitted by Mark Anderson on Mon, 2014-02-10 13:14
Are you saying that I need to first open and deposit my CD into an annuity at my current bank before transferring it to my current flexible annuity at the new bank?
Permalink Submitted by Alan - IRA critic on Mon, 2014-02-10 15:45
No, do not convert at the old bank. Open the Roth annuity at the new bank and find out how they want the check made out from the first bank OR ask them if they will handle the transfer of funds for you. If they will, be very careful to provide them with the correct expiring CD number, Banks operate in different ways when it comes to rollovers or transfers and coordination between them can be spotty. Many banks will only make the check out to you. If that happens just deposit it in your bank account and write a new check to the new bank for your Roth annuity. You do not HAVE to move the funds by direct transfer, doing a 60 day rollover is OK.