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Rollover IRA to 401(k)

If your employer offers a 401(k) that accepts funds from an IRA (Individual Retirement Account), you might be tempted to roll over your IRA to your employee 401(k) plan. However, there are multiple reasons to keep your IRA intact.

Read on to learn about a rollover, reverse rollover, and what option is best for you.

What Is an IRA Rollover?

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A rollover is the movement of assets between similar retirement plans. When you participate in a rollover, the funds you receive from your original retirement plan must be redeposited in an IRA plan or other retirement plan within 60 days.

Can I Roll Over My IRA Into a 401(k)?

You can roll over your IRA into a qualified retirement plan, like a 401(k), as long as the retirement plan allows this type of rollover. Roth IRAs can be rolled over only to another Roth IRA.

3 Reasons to Avoid Rolling Over Your IRA Into a 401(k)

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An IRA offers many advantages that are not available with a 401(k). You should consult your financial or tax advisor before opening or contributing to an IRA.

Here are three reasons to keep saving your contributions in an IRA:

  1. Low cost portfolio management—Not all 401(k) plans come with free financial advice. If you need help choosing which products you want to support your IRA with, you’ll have greater access to lower cost advisors with an IRA.
  1. More options to fill your portfolio—There is a wider range of products available to support IRAs than mutual funds, index funds, and exchange-traded funds that typically support 401(k)s.
  1. Ability to shop for bargains—With so many deposit products available to IRA owners, you can shop around for the lowest-priced funds.

Not All 401(k)s Accept IRA Rollover Funds

Even if you think rolling over your IRA into a 401(k) will benefit you, your employer may not allow it. Those that don’t worry about being held liable if disallowed deposits are made into their 401(k)s.

If you want to maximize your retirement savings opportunities in an IRA, contact the retirement savings experts at Synchrony Bank. Our award-winning ratesmake IRAs from Synchrony Bank an excellent choice for retirement saving. 

Synchrony Bank does not provide tax advice so be sure to contact your tax advisor or financial consultant before opening or contributing to an IRA, or taking any action with regard to your 401(k).

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Sources:

IRS: https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras-rollovers-and-roth-conversions:

+National Average APYs are based on specific product types of top 50 U.S. banks (ranked by total deposits) provided by Informa Research Services, Inc. as of 11/01/2016. CD Rates: Average APYs are based on certificate of deposit accounts of $25,000. Although the information provided by Informa Research Services, Inc. has been obtained from the various institutions, accuracy cannot be guaranteed.


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