How to Close IRAs
- 1). Go to your bank or the investment firm that holds your IRA account. Provide your broker or a banker with one form of personal identification such as your passport, as well as your account number or Social Security number.
- 2). Ask the broker or banker for your current IRA account balance. Explain that you need to close the account and ask if you have to pay any early redemption fees or account closeout fees if you close the account. Instruct the custodian to close the account.
- 3). Instruct the custodian to withhold money from your disbursement to cover any applicable income tax but if you intend to roll your money to a new IRA account then instruct your custodian not to withhold any funds. Custodians typically withhold 10 percent of traditional IRA disbursements unless you specify otherwise and some states also require custodians to withhold money to cover state income tax unless you roll the funds to a new retirement account. If you have a Roth IRA, your custodian only withholds funds for taxes if instructed to by you.
- 4). Ask the custodian to make the disbursement check payable to you unless you plan to roll the money into another IRA in which case the custodian must make the check payable to the new custodian. The payee line of the check to the new custodian must also feature the words "for the benefit of" and your name, so that the new custodian can direct the funds into your new IRA account. If your IRA holds securities, then your broker must sell those securities and you should receive the proceeds within a few days.