Rollovers and transfers

Rollovers and transfers are 2 ways to move money from other retirement accounts into your Robinhood IRA.

  • A transfer is a non-reportable movement of funds between 2 retirement accounts of the same type, such as transferring money from one traditional IRA into another traditional IRA. This type of transfer doesn’t generate a tax form and is not reported to the IRS.

    • Example: If you transfer a traditional IRA with ABC Financial to your traditional IRA at Robinhood.
  • A rollover is a transfer of retirement assets from an employer sponsored retirement plan like a 401(k) to an IRA. This is a reportable but non-taxable event.

    • Example: If you stop working for a company and choose to move the funds in your company 401(k)to your traditional IRA at Robinhood.
Note

The IRS Rollover Chart shows what types of IRAs are eligible to rollover or transfer to and from. A tax professional can help you with advice for your specific scenario.

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Transfers

Eligible assets from your outside IRAs can be transferred into Robinhood through the Automated Customer Account Transfer Service (ACATS). We’ll reimburse the IRA closing or transfer fee that the other brokerage might charge, up to $75, provided we receive proof of the charge.

Get started

  1. In the app, select RetirementMenu (3 bars) or Settings (gear)
  2. In IRA SettingsActions, select Transfer in an external IRA
  3. Follow the prompts in the app to complete the transfer
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Rollovers

When you leave a company where you participated in their employer-sponsored retirement plan like a 401(k), a rollover is just one of the following options you’ll have:

  • Leave your money in the plan
  • Roll the assets into your new employer’s retirement plan (if they allow it)
  • Cash the plan out
  • Roll over the assets to an IRA provider like Robinhood.

FINRA’s 401(k) Rollovers has more about the benefits, considerations, and tax implications with these options.

You can do either a direct rollover or an indirect rollover with Robinhood.

Direct rollover

A direct rollover is the movement of money from an employer sponsored retirement plan like a 401(k), where the funds are made payable and deposited directly into an IRA.

As long as your employer plan provider sends the funds for deposit directly to your new traditional IRA provider, you don’t have to pay taxes on the movement.

Example

Let's say you are leaving MEOW company and want to rollover your 401(k) to a traditional IRA at Robinhood. A direct rollover is when you ask the MEOW company to send a check that’s payable to your Robinhood IRA, and the funds are deposited directly into your Robinhood IRA.

There is no limit to the number of direct rollovers you can make in a year. This is a reportable, but non-taxable event with the IRS, assuming it’s correctly reported with a Form 1099-R and Form 5498. Refer to the IRS Retirement Forms and Publications for details about what’s required.

Keep in mind

If you roll over assets from an employer-sponsored plan into an IRA and combine the assets with annual IRA contributions, you’ll lose the ability to move the assets into a new employer’s plan in the future.

Start a direct rollover

  1. Set up or use the applicable IRA in Robinhood:
  • For pre-tax assets in a 401(k), open or use a traditional IRA with Robinhood
  • For after-tax assets in a 401(k), you'll need a Roth IRA
  • If you're rolling over both pre-tax and after-tax assets, generally you’ll need both a Roth and traditional IRA
  1. Contact the plan admin of the 401(k) or other employer plan that you’re rolling over for the following:
  • Request a direct rollover of the 401(k)

  • Ask what’s required for this direct rollover because specific provider requirements vary, so make sure you understand what they need

  • Ask if you have before-tax or after-tax assets in your 401(k)

  • Ask if your plan requires your spouse’s signature to roll over to an IRA

  • Ask what details need to be on the check and make sure the check is payable to:

    Robinhood Securities FBO for your name IRA and your Robinhood IRA account number*

  • Ask that the check be sent to us, or if they mail it to you, then you’ll need to mail it to us at:

    Robinhood Securities, Direct Rollovers, PO Box 772994, Detroit, MI 48277-2994

After the check is deposited into your Robinhood account, we’ll notify you when the money is available to invest. You can then choose your own investments. Or if you’re unsure how to get started, check out Retirement recommendations.

Find your Robinhood IRA account numbers

  1. In the app, select RetirementMenu (3 bars) or Settings (gear)
  2. Select Account Numbers
  3. Your IRA account numbers are shown under their corresponding account names
Keep in mind

*Some plan admins may only offer to send a rollover check directly to you. If you get the check first, and the check is payable to your Robinhood IRA (not payable directly to you), then it’s still considered a direct rollover and you can send it to us for deposit using the details described in this section. Make sure the correct Robinhood IRA account number is on the check.

Indirect rollover

An indirect rollover is the movement of money from an employer sponsored retirement plan like a 401(k), where the funds are made payable to you and you take receipt of those funds in a non-retirement account prior to depositing them back into an IRA.

You can do an indirect rollover by asking your plan admin to transfer the retirement money directly to you as the account owner first. They will generally require 20% federal tax withholding on this movement, which will reduce the amount you will receive in the transfer. You then have 60 days to deposit the money into an IRA account. If you fail to redeposit the full amount into a retirement account within 60 days, it may be considered a taxable distribution unless an exception applies.

Example

Let's say you are leaving MEOW company and you request a distribution made payable to you. If you take possession of those funds and then decide to redeposit into a Robinhood IRA, this would be considered an indirect rollover. You’ll need to ensure your eligibility, including the 60-day requirement, prior to completing the deposit to the IRA.

Complete an indirect rollover

  1. In the app, select AccountMenu (3 bars) or Settings (gear)
  2. In Transfers, select Transfer money
  3. Select the account and dollar amount to transfer
  4. For the contribution type, select Indirect Rollover
  5. Review and select Contribute to complete the rollover

Once the funds are deposited at Robinhood, you can choose your own investments. Or if you’re unsure how to get started, check out Retirement recommendations.

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Disclosures

All investments involve risk and loss of principal is possible. Investors should consider their investment objectives and risks carefully before investing.

Funds being contributed into or distributed from retirement accounts may entail tax consequences. Contributions are limited and withdrawals before age 59 1/2 may be subject to a penalty tax.

Contents provided are for informational purposes only and do not constitute tax or investment advice. For specific questions, you should consult a tax professional. Robinhood does not provide tax advice. Links to third party sites are being provided for informational purposes only.

The Robinhood IRA is available to any customer with a Robinhood brokerage account in good standing.

Securities trading is offered through Robinhood Financial LLC, a registered broker-dealer and Member SIPC, and a subsidiary of Robinhood Markets, Inc. (Robinhood).

Reference No. 2677970
Still have questions? Contact Robinhood Support