If your financial institution has announced they are discontinuing IRA offerings, you may be unsure about what to do next. This news just hit home for account holders at American Express. They were recently informed that American Express is no longer offering Traditional and Roth Individual Retirement Account (IRA) products and all existing IRA accounts must be closed by Nov. 17, 2025.
Whether this change directly impacts you, or you want to be prepared for a similar scenario, it’s important to understand your options. Below, we outline the steps you can take to help safeguard your retirement savings, along with each approach’s benefits and potential drawbacks.
- Transfer to another financial institution. One of the most straightforward solutions is transferring your IRA to a new custodian through a direct trustee-to-trustee transfer. This option helps ensure that the tax-advantaged status of your IRA is preserved and avoids the risk of incurring taxes or penalties. However, it does require researching and selecting a new financial institution that aligns with your needs, which can be time-consuming. Additionally, the new provider’s investment options and fees may differ from what you’re accustomed to, so careful evaluation is essential.
- Rollover to another IRA. Performing a rollover allows you to withdraw your funds and deposit them into a new IRA within 60 days. While this option provides flexibility and gives you control over selecting a new custodian, it comes with risks. If the rollover is not completed within the 60-day window, the distribution may become taxable and incur penalties, particularly if you’re under 59 ½. Furthermore, you are limited to one rollover per 12-month period across all of your IRAs, so ensuring this is the right choice for your situation is important.
- Take a distribution. Taking a distribution from your IRA gives you immediate access to your funds, but it should be approached with caution. Distributions from traditional IRAs are generally taxable, and if you’re under 59 ½, they may also trigger a 10% early withdrawal penalty. While Roth IRA distributions may be tax-free under certain conditions, withdrawing funds early could still lead to penalties. This option should typically be considered a last resort, as it reduces your retirement savings and may have significant tax implications. Consulting a tax professional is highly recommended before taking this step.
Before deciding on a course of action, carefully evaluate your retirement goals, the tax implications of each option, and the offerings at potential new custodians. For nearly 40 years, Mercer Advisors has worked with families to help them simplify the complexity of their money and, most importantly, to help them figure out what it’s all for. We exist so that you don’t have to worry about money. For more information and guidance on making well-informed decisions tailored to your financial situation and long-term plans, let’s talk.
