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