Rollovers usually take 2—4 weeks to carry out. A 401 (k) rollover to an IRA lasts 60 days. Once you receive a 401 (k) check with your balance, you have 60 days to deposit the money into the IRA account. If you opt for a direct transfer from custodian bank to custodian bank, it can take up to two weeks for the transfer of 401 (k) to the IRA to be completed.
When you roll over directly from your current 401 (k) provider into an IRA, there is no time limit for completing the transaction. However, if you’re planning an indirect rollover, you may need to follow the 60-day rule. Even with direct rollovers, you should aim for the money to be transferred within the 60-day window. It usually takes 7-10 business days after the money has left your old provider for the money to be credited to your Betterment account.
This includes mail time, processing, and time to settle the money. You’ll be notified via email as soon as the funds appear in your Betterment account. This rule only applies to indirect rollovers, not to the more traditional direct rollovers as described above. With other direct rollovers, you can receive a check made in the name of the new 401 (k) or IRA account, which you forward to your new employer’s plan administrator or financial institution holding your IRA.
However, direct rollovers and transfers from trustees to trustees between IRAs are not limited to one transfer per 12 months, nor are transfers from traditional IRAs to Roth IRAs. If you choose to convert some of your pre-tax retirement money into post-tax retirement money, it’s a completely separate action that’s separate from any rollover activity. With an indirect rollover, you take control of the money to transfer the money to a retirement account yourself. It’s important to understand the 60-day rollover rule, which requires you to deposit all of your money into a new IRA, 401 (k), or other qualified retirement account within 60 days.
Using a rollover to transfer money from one tax-advantaged retirement account to another can be difficult with an indirect rollover. You can also choose an indirect rollover if you want to use the money as a short-term balance and deposit the money into the IRA account before the 60-day period is over. A direct rollover involves transferring money from 401 (k) plan to plan or from 401 (k) to an IRA. It’s the recommended way to transfer an old 401 (k). The 60-day rollover rule applies primarily to indirect rollovers, which are actually referred to as 60-day rollovers by the IRS.
The 60-day rule applies to indirect rollovers. You must deposit the money into an IRA within 60 days of being transferred from the 401 (k) plan. Careless planning can lead to unforeseen tax consequences, such as a high tax bill. So be sure to find out the details of your rollover before you start filling out the paperwork.
