What is a rollover distribution?

An IRA rollover, or direct rollover, is moving the funds from a company-sponsored qualified retirement plan to another account, which can be an IRA or another 401(k) or 403(b).

Rollover Chart

When you roll over a retirement plan distribution, you generally don’t pay taxes on it until you withdraw it from the new plan. By rolling over, you’re saving for your future and your money continues to grow tax-deferred.

Which retirement accounts can accept rollovers?

You can roll your money into almost any type of retirement plan or IRA. The table below displays retirement plans where you may have holdings. Follow the details across the table to see which retirement accounts can receive rollovers from the various retirement plans, and reference the footnotes for related details.

Navigating an IRA Rollover
Roth IRA Traditional IRA SIMPLE IRA SEP-IRA Governmental 457(b) Qualified Plan1 (pre-tax) 403(b) (pre-tax) Designated Roth Account (401(k), 403(b) or 457(b))

Roth IRA Yes2 No No No No No No No
Traditional IRA Yes3 Yes2 Yes2,7, after two years Yes2 Yes4 Yes Yes No
SIMPLE IRA Yes3, after two years Yes2, after two years Yes2 Yes2, after two years Yes4, after two years Yes, after two years Yes, after two years No
SEP-IRA Yes3 Yes2 Yes2,7, after two years Yes2 Yes4 Yes Yes No
Governmental 457(b) Yes3 Yes Yes7, after two years Yes Yes Yes Yes Yes3,5
Qualified Plan1 (pre-tax) Yes3 Yes Yes7, after two years Yes Yes4 Yes Yes Yes3,5
403(b) (pre-tax) Yes3 Yes Yes7, after two years Yes Yes4 Yes Yes Yes3,5
Designated Roth Account (401(k), 403(b) or 457(b)) Yes No No No No No No Yes6

1. Qualified plans include, for example, profit-sharing, 401(k), money purchase and defined benefit plans.
2. Only one rollover in any 12-month period.
3. Must include in income.
4. Must have separate accounts.
5. Must be an in-plan rollover.
6. Any nontaxable amounts distributed must be rolled over by direct trustee-to-trustee transfer.
7. Applies to rollover contributions after December 18, 2015. For more information regarding retirement plans and rollovers, visit Tax Information for Retirement Plans.

Source: IRS, March 2018

For Educational Purposes Only.

Information about IRA rollovers is intended to be educational only. It is not tailored to the investment needs of any specific investor.  This information should not be considered tax or legal advice.

IRA rollovers are subject to complex tax laws and regulations which are subject to change and which can materially affect investment results. Westwood cannot guarantee that this information is accurate, complete, or timely. Westwood makes no warranties regarding this information or results obtained by using it. Westwood disclaims any liability arising out of the use of, or any tax position taken in reliance on, this information. Be sure to consider all your available options and the applicable fees and features of each before moving your retirement assets.

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