How to Roll Over a 401k to an IRA

A direct rollover is the cleanest approach: your 401(k) plan sends the funds directly to your new IRA custodian, with no taxes withheld and no 60-day deadline to worry about. An indirect rollover, where the funds are sent to you first, requires you to redeposit the full amount into an IRA within 60 days to avoid taxes and potential early withdrawal penalties. You are generally allowed only one indirect rollover per 12-month period across all IRAs. Rolling over to an IRA typically opens up a broader range of investment options than most employer plans offer, and consolidating accounts can simplify your financial picture. However, there are situations where keeping funds in a 401(k) may make sense, such as if you plan to work past 73 or if the plan offers certain legal protections or low-cost institutional funds. Moore Invested helps clients evaluate rollover decisions as part of a broader retirement account strategy.

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