When you have a retirement plan, or many different types of retirement plan, you may be faced with decision-points when it would be helpful to rollover one plan into another plan. But do you know which type of plan I can rollover my retirement plan into?
What follows is a description of the types of accounts that you can rollover each particular source account into, along with the restrictions for some of those accounts. The IRS also has a handy rollover chart which describes these rollovers in a matrix.
Traditional IRA or SEP-IRA
A traditional IRA or SEP-IRA can be rolled over into:
- Another traditional IRA or SEP-IRA (once per year unless trustee-to-trustee transfer)
- A Roth IRA (amount rolled over must be included in income)
- A 401(k), 403(b), 457(b) (governmental retirement plan) profit sharing, defined benefit pension plan, or other qualified retirement plan (pre-tax only)
A Roth IRA can be rolled over only into another Roth IRA, and then only once per year unless it’s a trustee-to-trustee transfer
401(k), 403(b), 457(b) or other Qualified Retirement Plan
A 401(k), 403(b), 457(b) or other qualified retirement plan (QRP) is eligible to rollover the pre-tax amounts into all of the same destination accounts as a traditional IRA, with exactly the same restrictions.
Additionally, these plans’ pre-tax amounts may also be rolled over into a Roth 401(k), Roth 403(b) or Roth 457(b) within the same plan, and the amount rolled over must be recognized as income in the year of the transfer.
The post-tax amounts in these accounts can be rolled over into a Roth IRA after having left employment.
A SIMPLE IRA can be rolled over into all of the same accounts as a traditional IRA, with the same restrictions, plus the fact that the SIMPLE IRA must have been established for at least two years before it can be rolled over.
In addition, a SIMPLE IRA can be rolled over into another SIMPLE IRA without the 2-year restriction, however the once-per-year restriction applies unless the rollover is a trustee-to-trustee transfer.
Roth 401(k), Roth 403(b) or Roth 457(b)
These designated Roth accounts can be rolled over into a Roth 401(k), Roth 403(b), or Roth 457(b) account of another employer, only as a direct trustee-to-trustee transfer. These accounts can also be rolled over into a Roth IRA with no tax consequences.