Setting up an annuity IRA rollover is a fairly simple process with a few well-defined steps. If you’re setting up an annuity IRA rollover account, we’ll assume that you’ve already reviewed your financial plans and goals with your financial planner, adviser or tax accountant, and have determined that an annuity IRA is the right type of rollover account for your needs.

Once you’ve decided on an annuity IRA rollover account, you need to choose a provider for that account.  If you’re investing through your employer, that decision has likely already been made for you.  However, if you’re at a point where you can rollover your existing qualified account, it does make sense to also consider whether or not you should move your money into an account not associated with your employer.  Again, that’s a choice you should make in consultation with your financial planner or adviser.

For the purposes of this article, let’s assume that you’re setting up your own annuity IRA rollover account and need to choose a provider.  Evaluate potential providers by looking at the financial soundness of the provider and the diversity of their investment options, as well as their investment performance, fees and charges, and customer service.  Be sure to ask what the initial fees are for setting up the annuity IRA – setting up an annuity can be somewhat expensive, especially if you’re already close to retirement age.

Consider also how much control you’ll have over your money – are you a person who likes to make changes frequently and receive monthly reports, or are you comfortable letting investments ride for a while and getting an annual statement?  Many annuity IRAs are subject to early withdrawal penalties if you move your funds quickly, so they’re definitely an investment option for those concerned with long term growth.  Remember, there’s no right or wrong answer here – only what works best for you.

Having chosen a provider, it’s now time to establish your annuity IRA rollover account.  When establishing your account, be sure to tell the provider that you’re establishing the account to accept a rollover from an already existing account.  Once the account is open, verify with the account manager or trustee that the account is ready to receive the rollover.  One of the most common mistakes with any type of IRA rollover is trying to rollover money into an account that cannot receive the funds.  Unless your financial adviser has specifically advised you against it, ask for a direct rollover for your IRA rollover annuity, which is the type of transaction that provides you with the least amount of risk.

You can initiate your annuity IRA rollover request with the trustee or manager of the annuity IRA.  The trustee or manager will need information about the existing account that you’re moving your money from, as well as how much money you are rolling over.  There will probably be some paperwork for you to complete, although every provider has slightly different forms and requirements.  Treat these documents like any other important financial documents – complete the forms carefully and completely, making sure you understand them and all your questions are satisfactorily answered before signing, and keep a copy for your records.

Once you’ve completed this paperwork, the annuity IRA rollover account manager or trustee will carry out your wishes.  You’ll be notified when the rollover is complete, at which point you should double-check all paperwork again for accuracy.  You’ll also receive a copy of the 1099-R sent to the IRS whenever a rollover is performed and should include that information when filing your taxes.