Rollover IRA
Rollover a qualified employer retirement plan from a previous employer to a Firstrade IRA.

What is a Rollover IRA?

A Rollover IRA is an Individual Retirement Account that you may use if you're changing jobs or retiring to keep your investments growing tax-deferred without incurring penalties. By directly rolling over assets from your employer-sponsored retirement plan into an IRA Rollover, you'll defer your tax liability and may be able to completely avoid penalties. You may invest Rollover IRA assets in a wide range of investments including mutual funds, stocks, bonds, and CDs. Having a wide choice of investments to select can help you re-allocate your retirement portfolio to better fit your current investing time horizon and risk tolerance.

What plans qualify for a rollover or a direct rollover into an IRA?

You can request a direct rollover into a Rollover IRA from any of these plans:

  • 401(k)(contact plan administrator for rollover information)
  • 403(b)(contact plan administrator for rollover information)
  • Qualified Retirement Plans(Profit Sharing & Money Purchase Pension Plans)
  • ESOPs(Employee Stock Ownership Plans)
  • Thrift Savings Plans

Note: Only funds received from a Qualified Retirement Plan (QRP) - as governed by Internal Revenue Code Section 401(a) or a 403(b) TSA are eligible to be rolled over (rollover) or directly rolled over (direct rollover to an IRA).

How do I rollover my retirement plan directly to Firstrade?

Rollover to Traditional IRA

Use the following procedure to move money from a former employer's qualified retirement plan (such as 401(k), profit sharing plan, or money purchase pension plan) to a Rollover IRA at Firstrade.

  • STEP 1: Prepare the following documents:
    • Social Security Number, Employer' name and address (if applicable)
    • Beneficiary information including Social Security number and contact information
    • Statement from the financial institution carrying your plan
  • STEP 2: Open a Rollover IRA by completing our Online IRA Application.
  • STEP 3: Transfer from former company's retirement plan.

    You will have to liquidate the assets in your plan.

    Please consult with your plan administrator first. If your plan does not require any documents from Firstrade, you can simply request the rollover check to be sent to Firstrade.

    The check must be payable to:

    Firstrade Securities, FBO: [your name] / [Firstrade IRA account number] and sent to:

    Firstrade Securities Inc.
    30-50 Whitestone Expwy.
    Ste. A301
    Flushing, NY 11354

    If your plan administrator needs Firstrade to complete and sign certain documents, you may ask your plan administrator to send the documents to Firstrade, and we will complete the paperwork and return them to the administrator.

    Once the paperwork is completed, you may have your plan provider send the rollover check directly to Firstrade.

  • STEP 4: Utilize Firstrade's wide range of offerings, investment tools and research to get the most out of your retirement plans!

Rollover to Roth IRA

  1. If your plan is a Roth 401(k) or Roth 403(b), just follow the same steps mentioned above.
  2. If you want to move your money from a 401(k) plan to a Roth IRA, you have to first move the funds into a Rollover IRA at Firstrade, then convert your Rollover IRA to a Roth IRA.
  3. If you wish to convert your Traditional IRA to a Roth IRA, You'll have to pay taxes on the money you convert, and you won't be allowed to roll the money over to a new employer's plan in the future. Please visit the IRS's website for more information.

What is a "Direct Rollover"?

A Direct Rollover is when your employer sends your vested retirement plan balance directly to your IRA Account. This method allows you to avoid the 20 percent mandatory withholding imposed by the IRS if the distribution is paid directly to you.

To directly rollover to Firstrade, simply open a Rollover IRA and tell your benefits plan administrator that you want to directly roll over your distribution to Firstrade. Your employer will have you sign a form to authorize the rollover. Then, your employer will either deliver your distribution payout directly to your account, or provide you a check made payable to Firstrade Securities. Once you receive the check, you should deposit it immediately into your Rollover IRA.

Can I get back the 20% of my plan distribution withheld by my employer?

Yes. If you deposit your check into a Rollover IRA within 60 days, including the amount equal to the 20% withheld. If you do not make up the withheld amount, it will be considered a distribution and taxed as ordinary income. It could also be subject to a 10% early withdrawal penalty. By funding your Rollover IRA within 60 days with 100% of your retirement plan payout, you'll receive the 20% withheld by your employer as a tax credit when you file your tax return. It's important to remember that any amount of your payout not deposited into a qualified tax-advantaged account within 60 days is subject to the same taxes and penalties. And, you'll lose the opportunity to put those funds into a tax-deferred Rollover IRA.

*This information should not be construed as providing tax or legal advice. Please consult with your tax advisor or attorney regarding your individual situation.

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