401K To IRA Transfer More Than Once A Year???

July2022 | Jan 12, 2021 | 41 posts since 2018

Hi Everyone,

I was wondering if you can transfer a 401k to and IRA more than once a year?

I have looked everywhere, including the IRS web site and it says no but its saying IRA to IRA transfer, not a 401K to IRA.

Can someone help me with this?

Thanks!

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Answers

lou | Jan 13, 2021 | 1,004 posts since 2010

Alan1 may not be comfortable giving tax advice, but the IRS page he linked to clearly states you can do more than one rollover per year from a 401k to IRA. You, however, didn't ask that question. You wanted to know if you could do multiple transfers from a retirement plan to an IRA. The answer is yes. Transfers are not limited to one per year. You can do as many as these as you want.

alan1 | Jan 13, 2021 | 877 posts since 2015

lou -- July2022 subsequently clarified his initial question, writing: "I wanted to do a 401k to a Traditional IRA rollover. I found information on the IRA to IRA rollover ( once a year) but I was hoping a 401K to Traditional IRA rollover was not subject to the same IRS rules."

lou writes that July2022 "didn't ask that question." But he did ask that question in his subsequent comment. I believe July2022 deserves the elementary courtesy of having people read his/her comments before proffering a response. It's very clear to me that July2022 is interested in the issue of a rollover from a 401(k) plan to an IRA. But lou seems to believe otherwise.

lou | Jan 13, 2021 | 1,004 posts since 2010

Alan1, the article you linked to clearly states you can do more than one rollover in a year if the rollover is from a retirement plan (401K) to an IRA. For some reason you didn't want to state the obvious, which the IRS link makes abundantly clear.

July2022 | Jan 13, 2021 | 41 posts since 2018

Thanks everyone for the information! I had initially went to the IRS web site but got tripped up by the "legal-ese". Yes, I wanted to be absolutely sure this was possible before I possibly blundered.
Thanks again for your time and effort everyone! Now with things more hopeful, I'm going to dig deeper!

MY2CENTSWORTH | Jan 12, 2021 | 439 posts since 2016

I think you are using the incorrect term. What you are asking would be called a rollover because it is from two different types of accounts. While a rollover can look a lot like a transfer there is a difference. A rollover is only allowed once every 12 month period, not a calendar year.

Choice | Jan 12, 2021 | 937 posts since 2020

And no limit on a transfer...ira trustee to ira trustee...is the key with no irs reporting for a transfer

July2022 | Jan 12, 2021 | 41 posts since 2018

Thanks, It was a rollover. I wanted to do a 401k to a Traditional IRA rollover. I found information on the IRA to IRA rollover ( once a year) but I was hoping a 401K to Traditional IRA rollover was not subject to the same IRS rules

alan1 | Jan 13, 2021 | 877 posts since 2015

July2022 -- rather than provide you with my opinion (I happen to be a retired attorney who did not specialize in tax law), I think it might be helpful to provide a quote from the IRS website's page titled "Rollovers of Retirement Plan and IRA Distributions":

IRA one-rollover-per-year rule

You generally cannot make more than one rollover from the same IRA within a 1-year period. You also cannot make a rollover during this 1-year period from the IRA to which the distribution was rolled over.

Beginning after January 1, 2015, you can make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs you own.

The one-per year limit does not apply to:

rollovers from traditional IRAs to Roth IRAs (conversions)
trustee-to-trustee transfers to another IRA
IRA-to-plan rollovers
plan-to-IRA rollovers
plan-to-plan rollovers

https://www.irs.gov/retirement-plans/plan-participant-employee/rollovers-of-retirement-plan-and-ira-...
Page Last Reviewed or Updated: 12-Jan-2021
(emphasis added)

I suggest you read the entirety of that page, as well as material cited there.

I have no interest in providing legal advice on this question, nor am I qualified to do so. But this site seems to attract quite a few people who believe they possess such qualifications. You can pay attention to their legal opinions and advice. I think it makes more sense to pay attention to the statements of the Internal Revenue Service.

Choice | Jan 13, 2021 | 937 posts since 2020

Alan1... how did your post get revised/substituted from/for your original...was it you (after the “original“ 1 hour editing time) or the moderator...that’s my 2 cents...or are you the/a phantom moderator? If so, congrats! But, really, is “But lou seems to believe otherwise” (below) necessary?

GreenDream | Jan 13, 2021 | 358 posts since 2019

@alan1, no one in their right mind takes the opinions given in a web comment as legal advice. If people want legal advice, they'll go to legal professionals. Asking questions on forums like this is to get more informed on a subject. You can point people to the IRS information without all the additional puffery about providing legal advice.

CuriousDave | Jan 13, 2021 | 233 posts since 2018

It may come as a surprise to some to know that IRS publications, verbal comments and even the IRS' own official instructions for the completion of its tax forms - such as Form 1040 - have no legal precedential value. There is an existing hierarchy of tax law, at the top of which, unsurprisingly, is the U.S. Constitution, that most people are unaware of. It has occasionally happened that people have relied on IRS publications or form instructions for positions they took on their tax returns, only to discover later that they do not have the force of law. In addition, even IRS regulations, revenue rulings and procedures that would normally be considered to have legal status have on occasion been overturned by the courts. The rule involving one rollover per 12 months came about precisely because a court surprisingly found that an IRS ruling that did NOT include any limit on the annual number of rollovers was a misinterpretation of the law! Anyone wishing to take a tax position involving a significant dollar amount would be best served by consulting an experienced EA, CPA, or tax attorney.

GreenDream | Jan 13, 2021 | 358 posts since 2019

@July2022, the following IRS chart may be helpful in distinguishing the rules for each type of rollover you might ever want to consider:

https://www.irs.gov/pub/irs-tege/rollover_chart.pdf

Notice that the From "qualified plan" (which includes 401Ks per footnote "1") to "traditional IRA" square is a "YES without the "2" footnote for limited to once per 12-month period.

So, In short, the answer to your question, per the IRS, is that you can rollover from your 401K to a traditional IRA as many times as you want during the year.

GreenDream | Jan 13, 2021 | 358 posts since 2019

Notice, also, in that chart, that the "2" footnote only applies to rollover from one IRA or IRA type to another, the 12-month limit does not apply to rollovers from other vehicles (410ks, 403bs, 457b) to IRAs or vice-versa.

If you had wanted to do a rollover from one IRA to another, than per IRS guidance
https://www.irs.gov/pub/irs-drop/a-14-32.pdf
a trustee-to-trustee transfer would be the better way to go, as that is not subject to the limit.

GreenDream | Jan 13, 2021 | 358 posts since 2019

@MYCENTSWORTH, per the IRS, you can rollover from a 401K to an IRA as many times as you want:
"The one-per year limit does not apply to: … plan-to-IRA rollovers"

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