401K Roll Over to IRA
I was laid off last year from work due to covid. I was 54 at that time. Since I am no longer with the company, I am planning to transfer my 401K, held at Wells Fargo Bank to an IRA account at Citibank this year. I have read that I am allowed to do one roll over per year. And I heard from my former colleague that the final ESOP distribution from our company will be done before the end of this year. I know that this ESOP distribution is also considered a roll over. So my question is, do I need to postpone my plan of transferring my 401K to an IRA account this year since I cannot do two roll overs in a single year?
Please advise. Thanks so much!
Permalink Submitted by David Mertz on Fri, 2021-04-09 19:51
The one-rollover-per year rule does not apply to rollovers from a 401(k) or of ESOP shares. The limitation only applies to distributions from an IRA rolled over to another IRA (other than Roth conversions).
You’ll want to do direct rollovers to avoid mandatory tax withholding.