Roth IRA transfers to a new custodian do not reset the five-year clock, Ed Slott's IRAHelp says

Roth IRA funds can be transferred to a new custodian without penalty or negative tax consequences, and the five-year clock for qualified distributions of earnings does not restart. Sarah Brenner, director of retirement education at Ed Slott's IRAHelp, gives that answer in the Oct. 8 Slott Report Mailbag; the holding period continues rather than resetting because the custodian changed.

Brenner's operational advice is a direct trustee-to-trustee transfer; a 60-day rollover is riskier and carries more rules, she writes. This publication has reported the sharp end of that risk: miss the 60-day window and the distribution may be taxable and penalized. The once-a-year rollover limit counts traditional and Roth IRAs together.

Funds in an IRA belong to the beneficiary at the owner's death, even when no paperwork retitles the account, Brenner writes. Contingent beneficiaries fall away, absent a disclaimer, because the primary beneficiary has already inherited. If that beneficiary is a spouse who dies without naming their own beneficiary, the custodial document's default beneficiary inherits — often the estate. As this publication has reported, beneficiary designations that never get updated are a recurring failure point; here the spouse's own designation, or the custodian's default line, decides where the account goes next.