Rollover IRA Minimum

[dczech09]

Hey everyone!

Out of curiosity more than anything... does anyone know of any IRA providers who will accept rollovers of less than $1,000 AND do not require a minimum monthly investment?

I have been searching and I am finding that rollover IRA's can be open only with a minimum of $1,000 or a minimum monthly investment (automatic) of like $50 per month.

Unfortunately, this may leave some people with small 401k balances (less than $1,000) with no other options except cashing out upon leaving their employer.

[disneysteve]

Have you looked at a discount brokerage like Scottrade? I took a quick look at their site and can't find anything about a minimum opening balance. And they definitely wouldn't have a monthly deposit requirement on a rollover IRA since that is typically an account that you won't be adding to.

[scfr]

Yes - many banks and credit unions have money market IRAs with very low minimums.

[Petunia 100]

Schwab Target Retirement Index Funds have a minimum of $100. They are every bit as good as Vanguard's, at a slightly lower cost. I use Vanguard's myself, but would not hesitate to use Schwab's.

http://www.schwab.com/public/schwab/investing/accounts_products/investment/mutual_funds/mutual_fund_portfolio/target_funds

[dczech09]

Good to know!

I was curious because my fiancé had a small 401k from an old job (like a few hundred bucks). She could not find a rollover option, and besides she was back in school and needed the money, so she took the withdraw. Taxes won't be a big deal on that amount, but I was more interested in case something like this came up in the future.

[disneysteve]

She could not find a rollover option, and besides she was back in school and needed the money, so she took the withdraw. Taxes won't be a big deal on that amount

It's already done, so this is academic, but the taxes were certainly a big deal, as was the penalty. Maybe it wasn't a lot in actual dollars but she basically paid 35% of her money to get some cash for school. There were better options to fund school for sure.

[dczech09]

It's already done, so this is academic, but the taxes were certainly a big deal, as was the penalty. Maybe it wasn't a lot in actual dollars but she basically paid 35% of her money to get some cash for school. There were better options to fund school for sure.

It will be about 25% total, but I understand the point. I do not advocate such an action and will always recommend the rollover over withdrawal. But that is what she chose to do.

Bottom line: it is good to know that there are options for smaller rollovers