How Many Years Before You Can Transfer an IRA & Not Get Penalized?

Just because you have your individual retirement account money with a particular trustee doesn't mean you have to leave it there. You can open a new IRA account and make transfers anytime you want. How you choose to transfer those funds determines how often you can make such a move, and whether you'll be penalized.

Custodian or Trustee

Your IRA has to be held by either a trustee or a custodian. While there are subtle legal differences, they don't matter when it comes to your transfer schedule.


Rollovers, where you take money from one IRA to another within 60 days, never come with penalties. You can even put the money back into the same IRA if you want, which is sort of like taking a 60 day loan from your IRA. There is one time element involved here: you have to wait at least one year before you can do another rollover from that account.


You can avoid the one-year limitation with a trustee-to-trustee transfer. The assets move directly from the old to the new IRA. Since you never had the money yourself, there are no tax consequences or penalties. There is no waiting period before you can do a trustee-to-trustee transfer.

Taxes, Penalties and Fees

If you take a non-qualified distribution, you'll owe ordinary income taxes plus a 10 percent tax penalty. Even if you don't get hit with taxes or penalties from the IRS, your custodian might charge a fee for doing the transfer.

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