LIFE · BMC FIELD MANUAL
Retirement Account Rollover Checklist: Options, Fees, Taxes and Timing
A rollover is an account migration with tax consequences, not a race to open the first IRA in an ad. Inventory the money, compare every permitted destination, use the cleanest transfer path, and close the loop with records from both institutions.
The useful answer
- Compare four possibilities where available: leave assets in the former plan, move them to a new employer plan, roll to an IRA, or take a distribution; each changes cost, investment, service and tax exposure.
- Inventory pretax, Roth, after-tax and employer-stock amounts separately, plus loans, pending contributions, vesting, beneficiary designations and any plan-specific benefit.
- Prefer a direct rollover when appropriate and confirm the receiving instructions before money moves; a check payable to you can trigger mandatory withholding and a 60-day deadline.
- Save notices, authorizations, check or wire details, receipt confirmation, final statements and tax forms, then verify the destination, investments and beneficiaries rather than assuming completion.
Freeze the decision and inventory the account
Do not move money only because employment ended or a sales message created urgency. Download the summary plan description, latest statement, fee disclosure, investment menu, loan record and distribution notice. Record each source separately: pretax contributions and earnings, designated Roth amounts, after-tax basis, employer contributions and company stock. Note vesting, pending payroll deposits, blackout dates, minimum-balance rules and whether the former plan permits assets to remain.
Confirm beneficiaries on the old account and understand that a beneficiary designation can control outside a will. If there is a divorce, qualified domestic relations order, inherited account, required minimum distribution, hardship distribution, outstanding loan, employer securities, annuity feature or after-tax basis, pause for plan-specific and professional guidance. IRS identifies several distributions that are not eligible for rollover; a label such as retirement money does not make every dollar portable in the same way.
- Plan name, administrator, account and separation date: ________
- Pretax / designated Roth / after-tax / employer stock balances: ________
- Loan, QDRO, RMD, vesting, blackout or pending contribution: ________
- Current beneficiaries and plan-specific benefit to preserve: ________
Compare all destinations on one record
Leaving money in the old plan may preserve institutional pricing, plan fiduciary oversight or a useful investment and avoids an immediate transfer, but contributions usually stop and service can be less convenient. A new employer plan can consolidate accounts and may offer plan loans or other features, but it must accept the rollover and its menu and fees may not be better. An IRA can broaden investments and service choices while adding advisory, transaction or product costs and different creditor, loan and withdrawal rules.
Taking a distribution converts a transfer decision into a current tax and savings decision. The taxable amount not rolled over is generally income, and an additional early-distribution tax can apply unless an exception does. Compare each available destination using the same columns: eligibility, total annual plan and investment cost, advice charge, investment menu, default investment, stable-value or annuity access, withdrawal service, legal protections, loan treatment, beneficiaries, consolidation and future rollover flexibility.
- Old plan: keep eligibility, total cost, unique benefit and service limit: ________
- New plan: accepts exact sources, total cost, menu and loan rules: ________
- IRA: custodian, cash default, advisory or product cost and service model: ________
- Distribution: estimated tax, withholding, penalty question and lost compounding: ________
Map tax character before choosing the route
A destination must be eligible for the exact source. Pretax money moved to a traditional IRA or eligible plan can generally preserve tax deferral; conversion to a Roth destination can create current taxable income. Designated Roth plan money, Roth IRA money and non-Roth after-tax contributions follow distinct rules. Do not combine labels on a handwritten form or assume that a receiving institution will reconstruct missing basis. Ask both administrators to confirm source coding and use a qualified tax professional for split destinations or conversion analysis.
IRS says an eligible rollover distribution paid to you from an employer plan is generally subject to mandatory 20% withholding. To defer tax on the entire taxable portion through a later rollover, you would generally need to replace the withheld amount from other funds and complete the rollover within 60 days. A direct rollover sends the distribution to another eligible plan or IRA and avoids that mandatory withholding. The 60-day route is not a free extension and exceptions are technical.
- Exact source and tax character confirmed by old plan: ________
- Receiving account type accepts that source: ________
- Direct rollover / trustee route available and chosen: yes / no
- Conversion, after-tax basis or split-destination review owner: ________
Control the direct-rollover handoff
Open or confirm the receiving account first and obtain its rollover instructions from an authenticated channel. Record the exact payee wording, account identifier, mailing or wire instructions and whether a check should be sent directly or forwarded unopened. Then call the old administrator through a verified number, repeat the instructions and ask for expected liquidation, market-exposure, processing and delivery timing. Never redirect a retirement transfer using contact details from an unsolicited message.
Before authorizing, confirm which holdings must be sold, whether any can move in kind, what fees apply, where residual dividends will go and what happens to an outstanding plan loan. A loan offset can create a taxable distribution and may have a different rollover deadline, so it deserves plan-specific tax review. Save the distribution notice and authorization. If a check arrives, inspect the payee and account reference without endorsing or depositing it into a personal bank account.
- Receiving institution and account opened or verified: ________
- Exact payee, account reference and delivery route: ________
- Liquidation, in-kind, residual and market-exposure plan: ________
- Confirmation number, representative, date and expected arrival: ________
Audit fees, advice and investment after arrival
A successful transfer can still land in cash, a money market settlement fund or another default. Verify the amount received, source coding and any residual balance, then make a separate investment decision consistent with the account’s purpose, time horizon and risk capacity. Do not confuse a rollover representative with an impartial adviser. Ask how the person and firm are paid, which services create a fee, whether compensation changes by product and what standard of conduct applies to the recommendation.
Compare costs in dollars as well as percentages: plan administration, investment expense, advisory fee, sales load, transaction charge, surrender charge, managed-account fee and cash spread. A wider menu is not automatically better, and consolidation is not automatically worth higher cost. FINRA’s BrokerCheck and the SEC’s Investor.gov tools can help verify registered professionals and firms, while plan administrators and regulators remain the sources for the actual account rules.
- Amount and source received; residual balance checked: ________
- Arrival investment and intended investment decision: ________
- All-in annual cost in dollars and percent: ________
- Professional, registration, compensation and conflicts checked: ________
Close the loop for tax season and the next job change
Obtain written receipt from the destination and a final statement from the former plan. Reconcile gross distribution, withholding, direct-rollover amount and ending balance. Save Form 1099-R from the distributing plan and any Form 5498 or receiving-plan confirmation with the return workpapers; forms can arrive on different schedules. A direct rollover is generally reportable even when not taxable, so do not discard the forms because no money reached a checking account.
Review beneficiaries at the new destination, account access, multifactor authentication, trusted contact options and recovery details. Calendar a residual-balance check and an annual fee and investment review. If the transfer is late, misdirected, short or incorrectly coded, contact both institutions immediately and keep a chronology. Use DOL EBSA for employer-plan questions, IRS resources for federal tax rules, and qualified professional help for corrections rather than improvising a second transaction.
- Destination receipt, final statement and residual check complete: ________
- 1099-R, receiving record and tax preparer handoff saved: ________
- Beneficiaries, security and contact information reviewed: ________
- Exception or correction chronology and responsible institution: ________
Frequently asked questions
Do I have to roll over a 401(k) when I leave a job?
Not necessarily. Depending on plan terms and balance, you may be able to leave assets in the former plan, move them to a new eligible plan, roll to an IRA or take a distribution. Compare the actual permitted choices.
Why is a direct rollover usually cleaner?
The old plan sends the eligible distribution to the receiving plan or IRA, so the employer-plan mandatory 20% withholding that generally applies when an eligible rollover distribution is paid to you does not apply.
What happens if a rollover check is payable to me?
A payment to you can trigger withholding and starts a 60-day deadline for an eligible rollover. Do not guess: contact both administrators and a qualified tax professional immediately, especially if tax was withheld.
Can I roll pretax, Roth and after-tax money into one account?
The permitted destination and tax result depend on the exact source and account type. Have both institutions confirm coding and use qualified tax advice for conversions, after-tax basis or split destinations.
Sources and further reading
Claims checked against these official or professional sources on October 17, 2026.
- IRS — Topic No. 413, Rollovers From Retirement PlansCurrent federal overview of eligible distributions, 60-day timing, withholding, direct rollovers and possible additional tax.
- IRS — Rollovers of Retirement Plan and IRA DistributionsOfficial rollover routes, plan-to-plan and IRA rules, and links to current rollover resources.
- U.S. Department of Labor — Retirement Plans and ERISAOfficial participant hub for employer retirement-plan rights, disclosures, contacts and assistance.
- FINRA — The Importance of Investment Professional RegistrationInvestor guidance and official routes for checking investment professionals and firms.
- SEC Investor.gov — Investor ProfessionalsFederal investor-education guidance on choosing and checking an investment professional.