Direct Rollover (Trustee-to-Trustee Transfer)
- Funds to go directly from your old plan to your new plan or IRA
- You never touch the money.
- No taxes withheld, no penalties.
Direct rollovers are generally safer and simpler.
Retirement Plan Rollovers
A retirement rollover allows you to move funds from one retirement account to another—typically from an employer-sponsored plan like a 401(k) or 403(b) to an IRA or a new employer’s plan. The goal? To maintain tax advantages, avoid penalties, and keep your retirement savings growing.
Your Options When Leaving a Job
When you leave your employer, you typically have four choices for your retirement plan:
- Leave the money in your current plan (if allowed)
- Take a lump-sum cash distribution (subject to income tax and a 10% penalty if under 59 ½)
- Roll the money into a new employer’s plan
- Roll the money into an IRA
Lump-sum distributions can trigger significant taxes and penalties. Rollovers help preserve your savings and defer taxes.
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Types of Rollovers
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Indirect Rollover (60-Day Rollover)
- Funds are paid to you first.
- You must deposit them into a new account within 60 days.
- 20% of the taxable portion is withheld for federal taxes.
- Risk of missing the deadline and triggering taxes.
Things to Consider Before Rolling Over
- Compare investment options and fees between IRAs and employer plans.
- Understand tax implications, especially with employer stock (NUA rules).
- Consider creditor protection - employer plans may offer stronger safeguards.
- Know which distributions are ineligible for rollover (e.g. hardship withdrawals, RMDs).
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Ready to Start Planning?
Whether you're changing jobs, retiring, or consolidating accounts, a rollover can be a smart move. Preserve your tax advantages, avoid penalties, and keep your retirement on track.
Explore your options. Contact an Advisor. Make your move with confidence
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