Vanguard IRA Rollover: 5 Things to Consider Before Making the Switch

Last Updated on 26th July 2022 by Jeffrey Camerda

Using a wide range of low-cost index mutual funds and exchange-traded funds (ETFs), Vanguard has become one of the most powerful investing firms in the world. Rolling over retirement assets from a 401(k) to an Individual Retirement Account (IRA) is also a popular option for those using Vanguard. 

To entice investors, several investment firms, including Vanguard, have sought to make the rollover procedure as easy as possible.


  • In most circumstances, your employer will send a check straight to Vanguard, and you’ll need to fill out paperwork from them.
  • If you get the check, you must return it to Vanguard within 60 days to avoid IRS penalties.
  • Vanguard provides a wide variety of index funds and ETFs to pick from, as well as a wide variety of other investing options.

It’s critical to know what to anticipate and what information is needed to complete the rollover procedure in order to minimize delays. Listed below are five points to keep in mind:

  • There is a lot of paperwork involved in order to do this

You must contact both Vanguard and your employer to begin the rollover process. You may begin the rollover to an IRA on Vanguard’s website.

To begin, decide on the sort of account you’ll use for your IRA. Individual stocks, bonds, and certificates of deposit may all be bought and sold using a brokerage account, as well as mutual funds and ETFs that aren’t provided by Vanguard (CDs). Verify your account details by including a copy of your most recent quarterly 401(k) statement.

To release the money from your 401(k), many businesses want you to complete their own rollover documentation. Fill out this form and send it to your employer with the request that your rollover check is made payable to Vanguard, and then mail it straight to the financial institution.

It usually takes two to four weeks for the rollover to be completed once you have submitted all of your documentation.

  • Fees and costs should be considered 

There are no costs associated with completing your rollover with Vanguard. The majority of the time, your company does not impose any fees on you either.

Don’t forget to specify beneficiaries when you transfer your 401(k) to an IRA.

When transferring money from one account to another, there may be costs involved. Unless you satisfy particular minimum investment criteria or sign up for electronic statement delivery, Vanguard levies a $20 yearly account maintenance fee.

Additional fees may apply to brokerage accounts. Investing in Vanguard index funds and ETFs incurs no transaction fees, however, investing in non-Vanguard mutual funds and products may incur expenses. A separate commission schedule is applied to the purchase of individual stocks, bonds, or options contracts, which is based on the account’s total balance.

  • Investment Options That are available 

One of the major advantages of transferring your retirement funds to an IRA is the wide range of options it provides. IRAs, unlike 401(k)s, allow investors to choose from a wide range of investment possibilities.

There are hundreds of index mutual funds and ETFs available when you roll over your 401(k) to a Vanguard IRA. You may access the Vanguard family of funds, as well as most other fund family products if you open a brokerage account for your Individual Retirement Account.

  • Indirect Rollovers 

It’s possible that your company may send the rollover to you rather than Vanguard. “Indirect rollover” refers to this situation. Send the check to Vanguard as soon as possible if this occurs. A 60-day window has been set for the money to arrive so that any fines levied by the IRS may be avoided.

  • Making Rollovers from a Roth IRA account

Many companies now offer the Roth 401(k) option as a retirement plan alternative. Roth 401(k)s may be transferred to Vanguard in the same way as traditional 401(k). You would just be shifting your money from a standard IRA to a Roth IRA without incurring any extra fees.

On a final note;

The costs and restrictions involved, as well as the information you’ll need to supply to both your previous employer and Vanguard, are vital to know before you decide to roll over your 401(k) to a Vanguard IRA.

Jeffrey Camerda

Dr. Jeffery Camerda, PhD, is a financial planner who specializes in wealth management and retirement planning. With a PhD in Economics and Financial Planning, Jeffery represents the highest level of financial planning expertise and achievement in the USA In addition to preparing you for a career in financial planning, a PhD in economics and finance also prepares you for academic pursuits, such as becoming a university professor in teaching or doing research. Here at the Wealth Builder, our financial advisory company was founded in 2007 and services all across the USA with over 16 years of expertise. In order to provide the finest advice and services, we pay close attention to the specific financial circumstances and requirements of each client. In order to guarantee that our clients don't get a sales pitch for insurance or investments, as well as a lack of conflict of interest from a prospective commission-bearing corporations, Jeffery focuses on fee-based services. Financial planning for wealth managers, financial well-being workshops, and personal financial planning packages are all part of the company's offering. Jeffrey Camarda, PhD, CFA, EA is also the founder of the Family Wealth Education Institute, is a member of the Financial Planning Association and serves as the Chairman of Camarda Wealth Advisory Group

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