401K Rollover & IRA TRANSFERS
If i recall, one can only “transfer” an IRA once per year. If one rolls over their 401K to and IRA, and then separates funds in that Rollover IRA to say 2-3 other IRA’s for different planning and income stream purposes, has a rule been violated?
Permalink Submitted by Alan - IRA critic on Tue, 2025-01-07 18:02
Not if only one distribution was taken from the IRA.
Direct transfers between IRAs are preferred as they are unlimited in number because they are not treated as distributions.
The 401k to IRA rollover does not count because the distribution is not from an IRA. Once in the IRA there are unlimited direct transfers that can be used to split up that IRA into multiple IRAs. But if an IRA distribution is made, only one such distribution can be rolled over as a 60 day rollover in a 12 month period.
Note that if only one distribution occurred, there is no limit on the number of rollovers that can be made from that distribution because the rollover limit applies to distributions, not to the number of rollovers. Portions of that one distribution could be rolled into multiple other IRA accounts. That said, this can better be done with direct transfers to preserve that one allowed 60 day rollover for emergency situations.