Moving Your Roth Account
The year 2025 has been a turbulent time for the economy. Whether due to job loss or persons seeking better investment opportunities in volatile markets, retirement account funds are on the move more than ever. Fortunately, portability between different types of retirement accounts has expanded, creating more options for those relocating their money.
If you are among the growing number of savers choosing to use Roth accounts for retirement savings, you may have questions when it comes to moving your money.
Roth Options
As Congress expands the universe of Roth accounts, more options are available when it comes to moving retirement funds. Designated Roth plan accounts (such as Roth 401(k)s, 403(b)s, and governmental 457(b) plans) can be rolled into Roth IRAs or other Roth plan accounts, if the receiving plan allows.
Roth IRA funds can be moved to other Roth IRAs, but Roth plans cannot accept Roth IRA funds. Although no one should want to do this, a Roth account cannot be rolled over or transferred to a non-Roth account, such as a traditional IRA or qualified plan.
Roth SEP and Roth SIMPLE IRAs, which were established by the SECURE 2.0 Act, are slowly becoming more available as the arrival of IRS guidance has led to more custodians allowing these options. These accounts are subject to portability rules similar to those for non-Roth SEP and SIMPLE IRAs.
The Right Roth Moves
Once an individual understands the options for moving Roth funds, the next step is to complete the move correctly. The best way to ensure this happens properly is to move the retirement account funds directly from one Roth retirement account to another. Moving your Roth money directly avoids all sorts of complications and problems that come along with moving the funds indirectly (that is, by taking a distribution and then doing a 60-day rollover).
From work plans like a Roth 401(k), this means doing a direct rollover to another plan or to a Roth IRA. Instead of opting to receive the funds, the participant instructs the plan to send the funds directly to the receiving retirement account. A check made payable to the receiving plan administrator or Roth IRA custodian also qualifies as a direct rollover, even if it is sent to the plan participant for forwarding.
For Roth IRA funds, the best way to move money is by doing a direct transfer (if possible). The Roth IRA custodian would send the funds directly to the new account without the account owner ever taking receipt of the funds. Alternatively, a check could be made payable to the new Roth IRA custodian and sent to the Roth IRA owner for forwarding.
By Sarah Brenner, JD
Director of Retirement Education
Ed Slott and Company, LLC
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Christian Cordoba, founder of California Retirement Advisors, has been a member of Ed Slott's Master Elite IRA Advisor Group since 2007.