Transfers and rollovers | Robinhood

Transfers and rollovers

Transfers and rollovers 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 isn't 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 holdings from one retirement plan to another. This is a reportable but non-taxable event.

    • Retirement plan assets include a 401a, 403b, 457b, or a pension.
    • 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.

Transfers

Eligible assets from your outside IRAs can be transferred into Robinhood. We’ll reimburse the IRA closing or transfer fee that the other brokerage might charge, up to $75 for transfers of $7,500 or more in equity, options, and cash assets, provided we receive proof of the charge.

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

Rollovers

When you leave a company where you participated in their employer-sponsored retirement plan like a 401(k), you typically have 4 options for what to do with it:

  • Leave your assets in your former employer’s plan
  • Roll the assets into your new employer’s retirement plan (if they allow it)
  • Direct or indirect rollover of the assets to an IRA provider like Robinhood
  • Cash the plan out
Keep in mind

Robinhood can currently only accept rollovers in cash.

Benefits and considerations

The following are just some of the benefits and considerations when choosing one of the 4 rollover options. FINRA’s 401(k) guidance on retirement accounts has more about the benefits, considerations, and tax implications associated with these options.

Leave your assets in your former employer’s plan

Benefits

  • Investments remain tax-deferred
  • Investments may include mutual funds and money-market funds
  • Total costs may be lower than other alternatives
  • Protected from creditors and legal judgements under federal law
  • May be able to take loans against your account
  • Penalty-free withdrawals if you left your old employer after age 55 .
  • May be able to roll over to a future employer's plan later

Considerations

  • Potentially limited investment choices
  • Possible account maintenance fees
  • Can’t contribute new funds
  • Complications of managing savings across multiple plans

Rollover into your new employer’s plan

Benefits

  • Investments remain tax-deferred
  • Investments may include mutual funds and money-market funds
  • Total costs may be lower than other alternatives
  • Protected from creditors and legal judgements under federal law
  • May be able to take loans against your account
  • Can defer required minimum distributions (RMDs) if you work past age 73

Considerations

  • Potentially limited investment choices
  • Possible account maintenance fees

Rollover to an IRA

Benefits

  • Consolidate retirement assets into a single IRA to simplify things
  • Investments remain tax-deferred
  • No annual account maintenance fee at Robinhood (others fees may apply)
  • You typically get access to a wide range of investments
  • Penalty-free early withdrawals for qualifying circumstances (such as a first-time home purchase, higher education expenses, or reimbursed medical expenses)

Considerations

  • Can’t take a loan against your assets
  • Some investments offered in your retirement plan may not be offered in an IRA
  • Limited creditor protections
  • Holders of appreciated employer stock may lose certain tax benefits

Cash the plan out

Benefits After any taxes and applicable penalties, your money is available immediately

Considerations

  • Subject to mandatory 20% withholding for federal taxes if under age 59½
  • Subject to applicable federal, state and local taxes
  • Subject to a 10% penalty if you are under age 59½
Keep in mind

Robinhood doesn’t provide tax advice. Consult a tax professional for help with your unique situation.

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's 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.

Note

Robinhood allows you to choose your rollover method in the app. IRA owners can elect to partner with Capitalize, at no additional cost, to help find and connect with your employer plan provider to complete your rollover. Or you can do it yourself with the following steps.

Start a direct rollover

  1. In the app, select RetirementMenu (3 bars)
  2. In IRA SettingsActions, select Roll over a 401(k) or other employer plan
  3. Choose your rollover method:
  • Select Capitalize
  • Or do it yourself with the following steps

Steps to roll over your IRA

  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

Note

Some private shipping companies may not be able to deliver to P.O. boxes, especially for overnight delivery or if a signature receipt is required, so check with your chosen carrier to avoid delays in processing.

It may take 2-4 business days after we receive the check for it to update in our systems, so allow time for processing. If it takes longer, contact Robinhood Support. After the check is deposited into your Robinhood account, we’ll notify you when the money is available to invest.

Next, you can 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)
  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. If you can’t fit the account number on the Payable to line, you can write it directly on the check on the Memo line.

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 another retirement account.

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'll 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're 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 Account (person icon) → Menu (3 bars)
  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.

Disclosures

Not a recommendation to transfer or rollover. A rollover isn’t your only option for a retirement account. You generally have 4 options for what you can do with a 401(k) from a former employer. You need to consider the pros and cons of each option. Robinhood doesn’t provide tax advice. Consult a tax professional to understand your unique situation. For more information, review this FINRA article.

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 don't constitute tax or investment advice. Links to third-party sites are being provided for informational purposes only.

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

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All investing involves risk.

Brokerage services are offered through Robinhood Financial LLC, (“RHF”) a registered broker-dealer (member SIPC) and clearing services through Robinhood Securities, LLC, (“RHS”) a registered broker dealer (member SIPC). Cryptocurrency services are offered through Robinhood Crypto, LLC (“RHC”) (NMLS ID: 1702840). Review a list of RHC licenses for more information.The Robinhood Money spending account is offered through Robinhood Money, LLC (“RHY”) (NMLS ID: 1990968), a licensed money transmitter. Review a list of our licenses for more information. Credit card products are offered by Robinhood Credit, Inc. ("RCT") (NMLS ID: 1781911 and issued by Coastal Community Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc.

The Robinhood Cash Card is a prepaid card issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard® International Incorporated. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated.

RHF, RHY, RHC, RCT, and RHS are affiliated entities and wholly owned subsidiaries of Robinhood Markets, Inc. RHF, RHY, RHC, RCT, and RHS are not banks. Products offered by RHF are not FDIC insured and involve risk, including possible loss of principal. RHC isn’t a member of FINRA and accounts are not FDIC insured or protected by SIPC.

RHY is not a member of FINRA, and products are not subject to SIPC protection, but funds held in the Robinhood spending account and Robinhood Cash Card account may be eligible for FDIC pass-through insurance (review the Robinhood Cash Card Agreement and the Robinhood Spending Account Agreement).

Options trading entails significant risk and is not appropriate for all customers. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount.

Commission-free trading of stocks, ETFs and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities and certain OTC securities electronically. Keep in mind, other fees such as trading (non-commission) fees, Gold subscription fees, wire transfer fees, and paper statement fees may apply to your brokerage account. Please see Robinhood Financial's Fee Schedule to learn more.

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