I am rolling over from one ira to another one. The process from my financial institution is unclear. To make it short, it looks like I might have to do a normal transfer (using routing number). WOuld it trigger 10% earlier penalty? I remember reading somewhere, doing so would not incur penalty if the withdrawal is deposited back to another same 401k account within certain period.
Review the forms for transferring for the broker to which you will be transferring. If you still are not clear of the process, contact the broker for help and not a damn message board. The funds will be transferred from one 401K/IRA custodian to another. The process can vary for each broker.
%% NO, no tax or10% penalty= just make sure transfer it from broker to broker. MOST stuff like ETFs dont need to be sold, but just follow instructions, may take 4 days to 4 weeks.................................... SAY as example you are going to SCHW or IBKR, use thier instructions\forms; make sure to confirm it, i found out some online forms are NOT near as good as printing it out, 2 copies each] + Eagle mail one copy or FDX it . Simple + secure with paper + postage; NO you are getting it, its broker to broker to avoid penalty.Good question.
Do not take the money into your own name. Set the new account up at the new broker, then do the transfer. If you took a check, I believe you have 30 days to get it into your new account. Beware of exit fees!! Do NOT keep moving from broker to broker. If you get pissed off with one...Try to live with it. If it doesn't pencil out, move to the new one. Exit fees do add up...
In addition to what @Cabin111 wrote, if a rollover is paid to the account holder, 20% is withheld. https://www.irs.gov/individuals/international-taxpayers/pensions-and-annuity-withholding#:~:text=A payer must withhold 20,no withholding for the distribution. So even if the account holder reinvests the distribution in another IRA within 60 days, he or she would have to make up that 20% of the proceeds withheld to avoid taxes/penalties on that 20%. So make sure the rollover payment is made for the benefit of you, not directly to you.
A word of advice if I may. Communicate your intent to the people at the Target Account. Provide the Target Account with the required info to enable them to drive the bus. Let them Pull the funds directly into the Target Account from the Source account. The Source Account will just be responding to authorized requests from the Target Account. You don't want a check cut. Nope.