What is a rollover IRA?

A rollover IRA is an individual retirement account (IRA) that you create when you want to move your money from a tax-qualified retirement account—like an employer-sponsored 401(k) or 403(b)—into an IRA account.

What is the difference between a rollover IRA and a regular IRA?

A rollover IRA is an account you can roll over funds into from a different qualified retirement plan—like a 401(k) or 403(b). A traditional (or regular) IRA is an IRA that you fund directly with your own contributions, meaning the money doesn’t come from a different retirement account. While the two types of accounts function similarly, there are nuances between rollover and traditional IRAs to consider when determining how to fund your IRA.

Does your money grow in a rollover IRA?

While your gains depend on your investments and the market, the money in a rollover IRA account will function as it would in your employer-sponsored account.

Do you pay taxes on a rollover IRA?

When done correctly, an IRA rollover is tax-free. However, there are certain IRA rollover rules that can trigger taxes and penalties when transferring funds from a 403(b) or 401(k) to a new IRA.

Can I withdraw money from a rollover IRA?

Yes, your IRA money is yours to withdraw when you need to. Before withdrawing money from your IRA, be sure to understand IRA withdrawal rules so you can avoid extra taxes and penalties.

What is the difference between an IRA transfer and an IRA rollover?

An IRA transfer happens when you move money between two of the same type of retirement accounts—like moving money from one 401(k) account to another 401(k). A rollover happens when you move money from one retirement plan type to another—for example, completing a rollover from a 401(k) to an IRA.

How long do I have to roll over my 401(k) after leaving a job?

You can rollover your 401(k) to a SoFi IRA anytime after leaving your job. Note that if you have an outstanding loan from your previous employer’s 401(k), you may have to pay it back before rolling over your funds. Check with your previous and new providers for more details.

What’s the difference between a direct and indirect rollover?

A direct rollover occurs when your previous retirement plan provider sends funds directly to your new provider. An indirect rollover refers to receiving a distribution from your retirement account and having 60 days to deposit it into another account. However, it's important to note that a 20% tax withholding applies in this case. To complete a tax-free indirect rollover of the entire distribution, you must add your own funds to cover the withheld amount. If the rollover isn't completed within 60 days or the full amount isn't deposited, taxes and potential penalties may apply.

Rollover IRA: Move Your Old 401(k) to an IRA

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¹Terms and conditions apply. For 401(k) rollovers, existing SoFi IRA members must complete 401(k) rollovers via this link. For SoFi members without a SoFi IRA, a SoFi IRA must first be opened, and 401(k) rollover must be completed utilizing Capitalize via this link. SoFi and Capitalize will charge no additional fees to process a 401(k) rollover to a SoFi IRA. SoFi is not liable for any costs incurred from the existing 401k provider for rollover. Please check with your 401(k) provider for any fees or costs associated with the rollover. Click here for SoFi’s 1% Match terms and conditions.

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