Although both rollovers and transfers allow you to move your retirement savings from one financial institution to another, the process for each is different, and each have different rules.
A 401(k) rollover occurs when you move retirement funds from an employer-sponsored plan to an IRA— this is why it's also called a Rollover IRA. This option is typically chosen when an employee leaves a job and is no longer contributing to the employer-sponsored retirement plan.
A Transfer is when you move your IRA to another IRA at a different institution. In the case of a transfer, funds or assets are sent between institutions, from the previous custodian or trust company to the new one. This is not only the quickest, but also the best method of moving your IRA to a self-directed IRA.
IRA-to-IRA transfers are easy and the best way to move your retirement savings from one custodian to another. For example, you would do a transfer when moving an IRA from broker dealers like Fidelity, Schwab, Vanguard, TD Ameritrade, etc. to IRAR.
Transfers are initiated at the company where you want to move the IRA. For example, if you wish to move your IRA to IRAR:
You can transfer as much as you want or only the portion of your account you wish to invest in alternative assets— investment options typically not available or allowed at your current provider such as real estate.
It is when you move retirement funds in an employer-sponsored plan—such as a 401(k) and deposit into an IRA. There are two types of rollovers, Direct Rollovers and Indirect Rollovers.
A Direct Rollover is when the retirement funds in an employer-sponsored plan—such as a 401(k), are moved directly from one institution to another, and then deposited directly into an IRA. This is the most productive method of moving an old 401(k) to a self-directed IRA because you, never take direct possession of the funds, and therefore the mandatory 20% withholding for taxes is not applied.
The rollover transaction is usually initiated by you—the plan participant—and requires only two steps: One, open an account and complete a Rollover Certification Form. Two, complete the forms required by your employer to move the funds out of your 401(k).
An indirect rollover—also referred to as a 60-day rollover—is when you take possession of your retirement funds and/or assets before depositing them back into a retirement account, and do so within 60 days. For example, if you request your funds from your old 401 k—but have not yet established an IRA in which to deposit those funds, in most cases your employer will give you a distribution check in your name. You’ll then have 60 days from the day the distribution check was issued to deposit those funds in a retirement account. If you fail to complete the transaction in the 60-day window, you will be taxed and penalized if you are under age 59.
Leaving your job shouldn't mean leaving your retirement on hold. Consider a 401k rollover, a strategic move to consolidate your retirement savings and keep them growing tax-advantaged. Whether you're switching employers or seeking wider investment options, rolling over your 401k to a self-directed IRA unlocks flexibility and control.
Why Rollover?
Take charge of your retirement journey – download the guide below to learn how to rollover a 401(k) to a self-directed IRA!
An IRA provider may charge fees when money is being put into a new IRA or taken out of an old IRA or 401(k). Here are a few types of fees to look out for when choosing your IRA provider based on fee structures.
Transferring money by wire will usually result in a fee charged on both ends, by the sending and receiving institution. Understand your custodians' fee schedules.
Custodial fees are usually a type of account maintenance fee. Your IRA custodian may charge them monthly or annually.
In most cases, there are fees charged for transferring your 401(k) to a newly opened, tax-advantaged retirement account with a different IRA custodian.
The IRS does not determine rollover or transfer fees. Instead, this is determined by your IRA provider. That’s why selecting the right rollover IRA provider is essential to keep fees minimal. Overall, your IRA provider should support you by providing reduced fees and supporting your financial growth.
The answer is clear and simple!
Your account will be serviced by an experienced team of Certified IRA Services Professionals (CISP) with expertise in self-directed IRAs. Our knowledge and experience in self-directed IRA rules, regulations, and recent trends, will assist you in making smart educated decisions.
You’ll also be able to save over 50% compared to fees charged by other industry providers. We believe in maintaining lower fees because we’re committed to helping you build long-lasting retirement wealth.
At IRAR we see many cases in which IRA owners transfer their existing self-directed IRA to IRAR because they’ve grown unhappy with their current provider; account fees were too high, poor service, or the provider has gone out of business or changed in management.
Regardless of the reason, we want to help.
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