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"Transfer" and "rollover" are often mentioned interchangeably and are relatively similar transactions. Both involve the movement or consolidation of tax-advantaged money from one self-directed retirement account into another. If you have three 401(k)s and two IRAs, you can bring those accounts together via transfer and rollover without any inherent tax or penalty concerns. There are, however, key distinctions between transfers and rollovers that are worth bearing in mind.

A transfer is a movement of funds between identical or similar account types. For example: Tranditional IRA to Traditional IRA, Roth IRA to Roth IRA, SEP IRA to Traditional IRA (or vice versa), and so on.

A rollover is a movement of funds between dissimilar account types with the same tax statuses. For example:401(k) to Traditional IRA, 403(b) to Traditional IRA, Roth 401(k) to Roth IRA, and so on.

Compatibility Chart

Roth IRA Traditional IRA SIMPLE IRA SEP IRA Governmental 457(b) Qualified Plan
(pre-tax)
403(b)
(pre-tax)
Designated Roth Act.
(401(k), 403(b), or 457(b))
Designated Roth Act.
(401(k), 403(b) or 457(b))
yes no no no no no no yes
distributions must be rolled over by direct trustee-to-trustee transfer
403(b)
(pre-tax)
yes
must include in income
yes yes yes yes
must have separate accounts
yes yes yes
must include in income & be an in-plan rollover
Qualified Plan
(pre-tax)
yes
must include in income
yes yes yes yes
must have separate accounts
yes yes yes
must include in income & be an in-plan rollover
Governmental 457(b) yes
must include in income
yes yes yes yes yes yes yes
must include in income & be an in-plan rollover
SEP IRA yes
must include in income
yes yes yes yes
must have separate accounts
yes yes no
SIMPLE IRA yes
after 2 years, must include in income
yes
after 2 years
yes
after 2 years
yes
after 2 years
yes
after 2 years & must have separate accounts
yes
after 2 years
yes
after 2 years
no
Traditional IRA yes
must include in income
yes yes yes yes
must have separate accounts
yes yes no
Roth IRA yes no no no no no no no

Note: You may execute one IRA-to-IRA rollover every 12 months. There is no such limitation on IRA-to-IRA transfers,
nor is there a limit on rollovers between dissimilar accounts (401(k)-to-IRA).

Frequently Asked Questions

FAQ Transfer Rollover
How does the process get started? You submit a completed Transfer/Rollover Form to NDTCO, and we send it to your resigning custodian. Submit a completed Transfer/Rollover Form to NDTCO AND contact your plan administrator to initiate their rollover process, which may include their form(s).
How will my assets move to NDTCO? Directly - Your resigning custodian will send transferred cash and assets directly to New Direction Trust Company. Directly or Indirectly - In most cases, you can influence how the movement of cash and assets occurs.
Is the transaction reported to the IRS? No - Because funds move directly between custodians, the IRS will not be notified about transfer activities. Yes - Rollovers are reported to the IRS as cash and assets leaving one trustee and being received by another. This must occur within 60 calendar days.
Will I have to pay any taxes? No - Direct transfers between custodians don't carry tax implications. No - If properly executed, there is no tax event associated with a rollover.

Other Key Considerations

In-Kind Transfers/Rollovers

You may move or consolidate assets in the same manner as cash if you so choose. For example, if your IRA owns precious metals, you can transfer those assets to another IRA with another custodian without having to liquidate the items beforehand.

IRA-to-IRA Rollovers

There are generally no limitations to the number of transfers or rollovers you can make, nor are there limits on the dollar amounts you may move. A key exception applies to IRA-to-IRA rollovers. If, contrary to the process of a transfer, you elect to intiate a distribution from one IRA and re-deposit the applicable cash or assets into another IRA within 60 days, you may not do so again for another 12 months.

To reiterate, there are no such limits on IRA-to-IRA transfers.

How long will the process take?

Although New Direction Trust Company prides itself on prompt transaction processing, transfers and rollovers can present varying timeframes. It could be days or even weeks between first initiation and receipt of the funds, depending on the procedures of the resigning custodian.

  • If you want to transfer or roll cash but your account holds assets, resigning custodians will almost never accept our transfer paperwork as authorization to liquidate positions. They will likely require direct authorization from you. To help ensure a smooth transfer process, we encourage you to contact your resigning custodian to confirm your available cash balance and liquidate your holdings if needed.
  • While many custodians accept faxed or e-mailed copies of transfer documentation, others may require your original wet-ink signature. Such paperwork will have to be mailed to our office for processing, which may lengthen the timeframe a bit.
  • The resigning custodian will typically notify the receiving custodian if a transfer request has been rejected, but not always. If they simply put the transaction on hold, we (and you) may not receive word unless we request an update. As such, New Direction Trust Company will contact your resigning custodian if your transaction goes unfulfilled for a period of time. Some custodians will only speak with their clients, so please don't hesitate to follow up with your account representative as well.

Transferred or rolled funds will either be available five business days (for checks or ACHs) following deposit or one business day (for wires) following deposit. For transfers, you may request that your resigning custodian issue funds through any of those three methods. For indirect rollovers, you would orchestrate the deposit yourself.

NOTE: New Direction Trust Company cannot accept cash deposits for any reason.

Transfer/Rollover Form

  • Transfers: DO NOT SEND TRANSFER PAPERWORK DIRECTLY TO YOUR RESIGNING CUSTODIAN. We, as the receiving custodian, must sign the Letter of Acceptance to affirm that your receiving account is qualified to hold the cash or assets from your resigning account.
  • Rollovers: You must complete and submit the Transfer/Rollover Form to our office even though you will initiate the rollover distribution (your resigning custodian will likely provide their own paperwork). We retain the document so that we may property account for the deposit upon receipt.
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